Transcorp

[prince dagbolu]

Originally Posted by obinnaD

....nigerian cynicism.

Tom is highly respected and is working hard to transform a moribund company. Ofcourse we wouldn't let him do just that - everyone is expecting a quick-fix solution. Whatever, they still have Patrick Okigbo ( former Citi group vice president) in transcorp. He joined just after Tom.

I suggest people give them some time to fix things. As for investors, the choice is clear: sell now, count your losses and move on or stay put and hope for the best. I take exception to casting aspersions on some of nigeria's brightest and most distinguished business leaders.

Well said. Hope more people will agree with you.

[Apache]

Originally Posted by obinnaD

....nigerian cynicism.

Tom is highly respected and is working hard to transform a moribund company. Ofcourse we wouldn't let him do just that - everyone is expecting a quick-fix solution. Whatever, they still have Patrick Okigbo ( former Citi group vice president) in transcorp. He joined just after Tom.

I suggest people give them some time to fix things. As for investors, the choice is clear: sell now, count your losses and move on or stay put and hope for the best. I take exception to casting aspersions on some of nigeria's brightest and most distinguished business leaders.

Ah! ObinnaD, nice to hear from you after such a long time. Meanwhile, how's your programme going. Are you through?

[Babs_O]

Originally Posted by obinnaD

....nigerian cynicism.

Tom is highly respected and is working hard to transform a moribund company. Ofcourse we wouldn't let him do just that - everyone is expecting a quick-fix solution. Whatever, they still have Patrick Okigbo ( former Citi group vice president) in transcorp. He joined just after Tom.

I suggest people give them some time to fix things. As for investors, the choice is clear: sell now, count your losses and move on or stay put and hope for the best. I take exception to casting aspersions on some of nigeria's brightest and most distinguished business leaders.

Well said................!

I also like your signature. Believe the praise is for our Lord Jesus for redeeming us.

[kenebobo]

One thing I noticed about this stock is that it never trades below 2.5 there seems to be a very strong support there which if broken, may result in a great fall due to panic by investors.

[obinnaD]

Originally Posted by Apache

Ah! ObinnaD, nice to hear from you after such a long time. Meanwhile, how's your programme going. Are you through?

Thanks a lot Apache...yes, I am done with part A (the one starting with an M) and already into part B (the one starting with a P).

Babs O - Ofcourse I meant our Lord Jesus christ - he deserves the highest praise, atleast from us christians.

I'm simply hoping for the best for transcorp - I loved the economic model and concept - unfortunately, it hasn't worked out well with transcorp and nigeria

[hispy99]

Originally Posted by obinnaD

....nigerian cynicism.

Tom is highly respected and is working hard to transform a moribund company. Ofcourse we wouldn't let him do just that - everyone is expecting a quick-fix solution. Whatever, they still have Patrick Okigbo ( former Citi group vice president) in transcorp. He joined just after Tom.

I suggest people give them some time to fix things. As for investors, the choice is clear: sell now, count your losses and move on or stay put and hope for the best. I take exception to casting aspersions on some of nigeria's brightest and most distinguished business leaders.

But I hope you know that VPs are a dime a dozen at Citigroup?

[Babs_O]

Originally Posted by hispy99

But I hope you know that VPs are a dime a dozen at Citigroup?

That doesn't make it a piece of cake for all. Some degree of hardwork must be required. And I see as a level of certification to be competent in an area.

[waaan5]

Originally Posted by hispy99

But I hope you know that VPs are a dime a dozen at Citigroup?

Yea, it is just like answering a Manager or Supervisor in the US (check out Walmart).

[hispy99]

Originally Posted by Babs_O

That doesn't make it a piece of cake for all. Some degree of hardwork must be required. And I see as a level of certification to be competent in an area.

My comment was not to belittle Patrick Okigbo's achievement, but to put the use of "VP" title in perpective. At my former bank in Nigeria, VP equaled AGM, but that is not the case in the U.S banking industry. In the U.S, a VP, in most instances, is the next step after an Associate (which is what you are hired as after you finish graduate school).

sorry for the diversion, back to Transcorp.

[hispy99]

The Punch: ‘Transcorp needs $45bn to expand hospitality arm’

[fredski]

Originally Posted by threecrown

Thank you for your point my brother, Tom may be able to turn Trancorp around in the long run, but it will be easier for him to start and manage a new company than to turn Transcorp around. Though Transorp is now a private sector company e.g Nitel, many of its staff and even the goverment still treat it like a public sector/civil service company. And to succeed in Nigeria's peculiar business terrain, he has to be politically and politrickally inclinde. so i hope he is? He is welcomed.

"The Transnational Corporation of Nigeria Plc is "a Nigerian world-class mega-corporation managed by Nigerians and wholly owned by Nigerians." Transcorp was launched on the 21st of July 2005 at the Presidential Villa Abuja by President Olusegun Obasanjo.""

Key words are in bold. In a nut shell a foundation built on sand. Like there web site www.transcorpnigeria.com Click any link and you end up going nowhere

[Babs_O]

allAfrica.com: Nigeria: Transcorp Seals N600bn Deal With Hilton International (Page 1 of 1)

[kokoko]

Originally Posted by ofoegbu

I am happy to have a discussion with you on Transcorp being a "money spinner" and why you have that view. However, since 2005 when this idea was first floated, I for one never, ever bought in to it and I told anyone who cared to listen then. And the reason is fairly simple - the world is moving away from the model on which the whole concept of Transcorp is built on. In today's world of increased specialisation, lean, mean and nimble organisations, business at the speed of thought etc- how can one company expect to create significant value to shareholder by doing business in industries as diverse and different as tourism, telecoms, movie, oil & gas, education, mining, etc - all at the same time and expect to do better that companies whose 24/7 concentration is in just one industry and sometimes in just one sector in an industry.

IMHO, I do not see how Transcorp can deliver more value to a shareholder than, say, MTN or even Starcomms from the telecoms industry. Ditto for Oando or Total in oil & gas, Ikeja Hotel Holdings in tourism - especially when these niche players have best-in-class management team and Transcorp cannot even keep a management team for 1 year! Look at GE in the US, Daewoo in Korea etc - people have been calling for such companies to be broken up and Daewoo has already been broken up. GE was trading at $24/25 in 2003. Five years later it is trading at $33, an approximately 40% growth over 5 years. Compare that with S&P 500 that has done 65% over the same period. In other words, people who own GE are taking on more risk (since S&P 500 is more diversed than GE) and getting less return! And this is despite the fact that Jack Welch spent years building GE management through one of the best management programs in the world. If you think the folks at Transcorp can even come close to replicating GE's performance, than I have a continent to sell to you!

That is my problem with the whole concept - companies should stay in one industry and create value in that industry and leave it up to the investors / shareholders to diversify their investments across industries. Anything else is a recipe for chaos...

Just my 2 kobo worth of opinon ...

There are great posts on this thread, and thanks especially to Ofoegbu for the 'back-of-the-envelope' valuation method.

With regards to Transcorp business model, I could not agree with him more that it is moribund. I am of the opinion that the constituent parts of Transcorp are worth more than the whole and I am prepared to eat my hat if this is not true. Transcorp management needs to give serious thoughts to un-bundling the monster; selling of NITEL and other rotten bits to focus on hotel services. The company also needs another name (Transcorp has been renamed "Transcorpse' by many contributors to this thread!) Selling off parts will generate extraordinary income that can be re-invested in its core business or declared as profit as they deem fit. The problem is I just don't think there are many investors out there who will even buy NITEL with stolen money.

[hispy99]

Originally Posted by Babs_O

This appeared in many dailies today.

Copied from Thisday

Transcorp Seals N600bn Deal with Hilton International
• To build 10 new hotels in five years
From Kunle Aderinokun in Abuja, 06.27.2008

Transnational Corporation Plc (Transcorp) yesterday consummated a $5 billion (N600billion) deal with Hilton Hotels Corporation, which it disclosed entails the construction of 10 new hotels across Africa within the next five years.
The hotels, the corporation noted, will include four in Nigeria including Kano and Port-harcourt. Transcorp’s Group Managing Director, Mr. Tom Iseghoghi signed for the conglomerate while President of Hilton Hotels, Middle East and Africa Mr. Jean-Paul Herzog signed on behalf of Hilton.
Commenting shortly after signing the deal Iseghoghi said Transcorp was working with the Federal Government to change the face of tourism in the country.
For instance, he said, Transcorp was working on a plan with the Federal Government to develop tourism facilities in Abuja.
Iseghoghi who said “the signing of today’s agreement is a milestone between these two groups”, said, “We are happy with the good working relationship with the Transcorp Group without whose support nothing is possible.”
Iseghoghi stated: “Part of our plans for the new hotels was to build high end hotels, some will be more high-end more than the present Transcorp Hilton.
“Despite what is happening in the Niger- Delta, we still think that building a hotel in Port Harcourt is not a bad idea. Investment in hotels in Port Harcourt will make a lot of senses. It is also not a bad idea having two Hilton Hotel in Lagos and also in Abuja.
“We are also considering two hotels in the northern part of the country and Kano will be an appropriate location. It is also a nice idea to develop a hotel in Jos. Jos will also be an opportunity to develop a leisure hotel where people can go and relax.
“These are some of the indication of locations where the hotel may be built but as I said, we have to discuss with the Transcorp group.”
“The focus of Transcorp Hotel is to be the number one in Nigeria and in Africa. We want to build a hotel that has the best quality and class in the world.
“You should know that there are places that you can build 5-star hotels, 3-star and one star hotel. So you should know that its not everywhere that you can build a 5 star hotels.
“Therefore, in the neighbourhood, we are thinking of building hotel within the range of $400 million to $500 million for the sort of hotels we are thinking of. Therefore, all put together, we are aiming at the range of $4 billion to $5 billion,” he added.
Herzog said the new agreement has forward-looking clauses which gave the partnership opportunity to further develop Transcorp Hilton.
According to him, “the contract that we signed is one that recognises the dynamic of hotel business. we have had an excellent relationship for the past 20 years which has enabled the hotel to occupy the number one position in all indices for the past 20 years.”
Speaking earlier, General Manager of Transcorp Hilton Hotel, Mr. Andre Herrenschmidt said, “with the value that our owners have come to add to the hotel in the last two and a half years, our pole position as the number one has been further reinforced and the future outlook is very positive.”
Transcorp Hilton Hotel Abuja, which occupies an expanse of 199,500 square metres of prime-value land, commenced operations on April 14, 1987 with 670 rooms and suites spread on ten floors of the three-winged, 12-storey edifice.
It recently completed a comprehensive refurbishment of all 670 bedrooms, including 240 suites, valued at $50 million.
The refurbishment also includes the renovation of all 24 meeting rooms and the Congress Hall, installation of new ‘no-break’ UPS generators, kitchens and restaurant, and installation of interactive TV system with internet connectivity in all rooms, among others.
Hilton Hotels Corporation is a leading global hospitality company, with more than 3,000 hotels and 500,000 rooms in 76 countries and territories, including 135,000 team members worldwide.
It currently operates eight hotels in Africa that includes Nigeria, Morocco, Algeria , Ethiopia , Kenya , Cameroon and South Africa. Additional Hilton properties are under development in Africa in Equatorial Guinea ( Malabo ) and Uganda ( Kampala ).

Comments:
Tom please keep up the good work. Soner or later a greater multitude of investors will join the Transcorp train. Especially when Nitel is sold-off (or perhaps when the mafia milking it like the power sector criminals are tamed.).

NB:
Please this is not an invitation to buy Transcorp. But for information excahnge and log for SMN records.

where is the $5B funding coming from?

[iyke-d]

where is the $5B funding coming from?

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!

[iyke-d]

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.

Correction: That should be N55billion bond.

[Babs_O]

Originally Posted by iyke-d

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 N55billion 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!

iyke-d welcome to stock market nigeria. I remember your id on naira land on the thread in which I raised the question what is the correct CSCS number. You were right that the alphanumeric one was the one to use on PO forms !.
It worked for me on International Breweries.

I pray you are right on this your comment.

hispy99, you got a good answer from iyke-d.

[zainabusman]

Originally Posted by ofoegbu

I am happy to have a discussion with you on Transcorp being a "money spinner" and why you have that view. However, since 2005 when this idea was first floated, I for one never, ever bought in to it and I told anyone who cared to listen then. And the reason is fairly simple - the world is moving away from the model on which the whole concept of Transcorp is built on. In today's world of increased specialisation, lean, mean and nimble organisations, business at the speed of thought etc- how can one company expect to create significant value to shareholder by doing business in industries as diverse and different as tourism, telecoms, movie, oil & gas, education, mining, etc - all at the same time and expect to do better that companies whose 24/7 concentration is in just one industry and sometimes in just one sector in an industry.

IMHO, I do not see how Transcorp can deliver more value to a shareholder than, say, MTN or even Starcomms from the telecoms industry. Ditto for Oando or Total in oil & gas, Ikeja Hotel Holdings in tourism - especially when these niche players have best-in-class management team and Transcorp cannot even keep a management team for 1 year! Look at GE in the US, Daewoo in Korea etc - people have been calling for such companies to be broken up and Daewoo has already been broken up. GE was trading at $24/25 in 2003. Five years later it is trading at $33, an approximately 40% growth over 5 years. Compare that with S&P 500 that has done 65% over the same period. In other words, people who own GE are taking on more risk (since S&P 500 is more diversed than GE) and getting less return! And this is despite the fact that Jack Welch spent years building GE management through one of the best management programs in the world. If you think the folks at Transcorp can even come close to replicating GE's performance, than I have a continent to sell to you!

That is my problem with the whole concept - companies should stay in one industry and create value in that industry and leave it up to the investors / shareholders to diversify their investments across industries. Anything else is a recipe for chaos...

Just my 2 kobo worth of opinon ...

I agree with u. The era of jack of all trade is over. If Transcorp can just stick to the hotel business they will be better off.

It will take a long time for Transcorp to get to N7.5 which was the PO price. In the meantime one would have made a lot more money in the likes of Zenith, GTB etc. There far better opportunities at less risk out there than transcorp. We should avoid emotions when investing.

The simple fact that they have not released any quarterly result since the listing last year means i cannot go near it. Any analysis rght now is just guess work. Nobody oustide Transcorp knows the true financial health of the company.

[hispy99]

Originally Posted by iyke-d

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!.

First I must disclose that I do own a single share of Transcorp, just like I do not own a single share of IAA, Costain, Universal, Big Treat, and Zenith. If I had spare cash, I would only buy Costain and Zenith. My investment decisions are based on a number of factors including current/forward looking financial data, company/industry future prospects, coroporate governance and management expertise.

Let's assume that they are going to build just 2 hotels like you mentioned and need to borrow just 60% of $800 = $480m ~ N57B. $480m is still a lot of cash to raise. How much debt do they currently have on their balance sheet? What about exisiting debt covenants? Where are Transcorp's financials? How am I supposed to make a call on a company that has refused to release any financials. I do not know revenue and I have no clue regarding debt exposure. As far as I am concerned, I see too much talking. Give me financials please. I have said it before and I will say it again, if I see good numbers from Transcorp, I will quickly change my opinion, just like I have changed my opinion on a number of insurance companies that were over-priced several months ago, but now seem reasonably priced.

Don't know about other posts, but I know that I never knocked Tom's expertise. All I did was point out the error in a publication that he was never CFO at Pepsi.

[kenebobo]

Originally Posted by zainabusman

I agree with u. The era of jack of all trade is over. If Transcorp can just stick to the hotel business they will be better off.

It will take a long time for Transcorp to get to N7.5 which was the PO price. In the meantime one would have made a lot more money in the likes of Zenith, GTB etc. There far better opportunities at less risk out there than transcorp. We should avoid emotions when investing.

The simple fact that they have not released any quarterly result since the listing last year means i cannot go near it. Any analysis rght now is just guess work. Nobody oustide Transcorp knows the true financial health of the company.

I agree with you