Capital Hotel

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BPE set to offload Sheraton equity in stock exchange

By Everest Amaefule, Abuja
Published: Monday, 11 Aug 2008

The Bureau of Public Enterprises will on Thursday, offload the Federal Government’s shares in the Abuja Sheraton Hotel and Towers on the floor of the Nigerian Stock Exchange.

A statement issued by the Head of Public Communications at the privatisation agency, Mr. Chigbo Anichebe, on Sunday, said the transaction was coming more than 18 months after the agency’s last activity on the capital market.

The 637,919,840 shares of Capital Hotels Limited (owners of Abuja Sheraton Hotels and Towers), will be brought to the floor of the exchange by way of introduction.

The sale of 51 per cent equity to the core investor, Hans Gremlin Nigeria Limited, was successfully concluded in 2002.

In May 2007, the National Council on Privatisation approved the divestment of the remaining Federal Government’s shares in the hotel.

Stockbrokers are to offload 637,919,840 shares at N6.50 per share, representing the prevailing market price.

At the current price, the sale is expected to fetch the Federal Government about N6.15bn.

Anichebe said the shares would be sold on the seven floors of the stock exchange across the nation to satisfy the requirement of the privatisation law that such a sale must be done on the basis of equality of federal constituencies.

To address the socio-political imperative of wide share ownership, he added, the sale would be conducted not only on the floor of the NSE in Lagos, but also in Abuja, Port Harcourt, Onitsha, Ilorin, Yola and Kano.

The trading arrangement showed that the entire shares would be listed on the Lagos exchange on Thursday.

This will be followed by the sale of some of the shares on the floor on the same day.

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Abuja Sheraton grosses N2.5bn per annum’
By Everest Amaefule, Abuja
Published: Thursday, 21 Aug 2008
Director General, Bureau of Public Enterprises, Mrs. Irene Chigbue, on Wednesday disclosed that the Abuja Sheraton Hotel and Towers makes an average turnover of N2.5bn per annum.

Chigbue made the disclosure at the Abuja floor of the Nigerian Stock Exchange in a ceremony to mark the floating of 150 million shares of Capital Hotels Plc, owners of Abuja Sheraton Hotel and Towers.

At the end of the trading, which lasted about 10 minutes, investors purchased only 1.27 million shares at the rate of N6.50 per share out of the 150 million shares that were available for sale to the care of the interest of potential investors in the North Central zone of the country.

Chigbue said, “Strictly speaking, this is not a public offer. We are conscious of the peculiarities of our environment and the laws governing the privatisation programme as well as the level of awareness of our populace.

“Today, we are on the Abuja floor to keep with the bureau’s policy of fairness and transparency in the implementation of the privatisation programme.

“The investing public can never get it wrong with this company given that Abuja Sheraton Hotel controls the second largest share of the hospitality industry in Abuja with an average annual turn over of N2.5bn.”

The privatisation agency had last week offloaded Federal Government’s shares in the Abuja Sheraton Hotels and Towers on the floor of the Nigerian Stock Exchange. The 637,919,840 shares of Capital Hotels Limited had been brought to the floor of the Exchange by way of introduction.

The core investor sale of 51 per cent equity to Hans Gremlin Nigeria Limited was successfully concluded in 2002.

In May 2007, the National Council on Privatisation approved the divestment of the remaining Federal Government’s shares in the hotel.

To address the socio-political imperative of wide share ownership, the sale is being conducted, not only on the floors of the NSE in Lagos and Abuja. Port Harcourt, Onitsha, Ilorin, Yola and Kano would take their turns in the coming weeks.

Capital Hotels Plc was partially privatised by the sale of the company’s shares to the core investor (Hans Gremlin).

Prior to its initial privatisation, the hotel was heavily indebted to foreign creditors to the tune of $300m as at December 31, 2000.

This posed a major challenge in attracting the interest of potential investors to the hotel, Anichebe explained.

In resolving this problem, the Federal Government undertook to pay the liability and converted the value of the debt to equity.

At its Extraordinary Meeting of November 12, 2001, the company passed the resolution giving effect to that conversion in favour of the Federal Government, thereby increasing the share capital of the firm from N200m to N800m translating to 1,600,000,000 ordinary shares of 50 kobo each.

The conversion transferred 86.95 per cent of the company’s shares to the Federal Government, out of which 51 per cent was sold to the core investor. The balance of 35.95 per cent was added to the shares held by some government agencies, amounting to 41.19 per cent now earmarked for sale on the floor of the NSE.