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where is the $5B funding coming from?
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Thats a great question! In any case, keep in mind that their projected investment horizon for the new hotels is 5 years and out. Now, lets assume they were only able to actually build just 2 hotels at roughly $800million, they will only need to contribute about 20% to 30% (about $240million), while the balance may be borrowed. To really answer your question, its quite possible that they can raise the $240million when they shed 27% of their NITEL stake. Also don't forget that as recently as few weeks ago, Transcorp claim to be waiting for the government's (NITEL's board) approval to infuse N18billion into NITEL, thats another $150million or so. This is also factual because they raised about N22billion from their IPO.
The point I am trying to make is that people need to at least give Transcorp some credit. If you go back to reading this thread or read some Nigerian dailies, you will see that people have been predicting the demise of Transcorp ever since - the sky is falling! Instead, the company is still alive and waxing strong. They have made some mis-steps and have to contend with political forces and infighting, but the people at Transcorp are still way ahead of the game. Their IPO was underscribed, so what did they do? They arrange a $55billion bond, which essentially takes care of the high interest NITEL loans which would have sunk them. The government decides to reverse the sale of NITEL, only to re-reverse themselves again. Their Hilton Hotel is #1 in Nigeria otherwise you won't be reading about this latest deal.
People need to ask themselves while will any organization invest half a billion dollars to buy NITEL only to sit back and not take the driving seat? The answer to that is mainly due to the government's interference in NITEL, a situation where a minority stake holder is calling the shots over a majority stake holder. I find it amazing that most people including a minister can not tell the difference between leasing out SAT-3 to third parties to manage versus "selling" SAT-3. If Tom's proposal late last year to lease out SAT-3 to Cisco and Data Dimension was not put on hold by the ministry of information, I can bet you the fortunes of NITEL would have begin to change by now.
Disclosure: I am what some of you may consider a "stupid" investor who bought into Transcorp, yes, I invested during the private placement and while I am not happy that the price of their shares is currently not doing well, I still have very high hopes for Transcorp. I wasn't expecting to make a killing in two years, my outlook was about 5 years.
People need to be more objective in their criticisms and not let their biases or negativity do them in. Even some people are trying to knock the credentials of Tom and Okigbo. Do you guys honestly think that if Tom didn't know his onions, he would have made it far in corporate America? Are you kidding me? Whether Tom was actually a CFO of a fortune 500 company in the US or not, he is more than qualify to run any of Nigeria's fortune 5 company!