Sun International is set to sell off shares in Federal Palace Hotel and Casino.
NewsOnline Nigeria reports that South African hospitality group, Sun International Limited has announced plans to sell off 43% of its shares in Tourist Company of Nigeria Plc, the owners and operators of Federal Palace Hotel and Casino.
According to a notice seen by NewsOnline, Sun International Limited which owns a 49% shareholding in Federal Palace Hotel and Casino, is divesting 43% of its shares to Rutam Finance Company. Rutam Finance Company is an associate of Oma Investments Limited, another existing shareholder in Tourist Company of Nigeria Plc (TCN).
ALSO: FG Directs N1 Trillion Electricity Subsidy Savings To Social Services
In the notice signed by Lovelyn Aniekwe, TCN’s Company Secretary, it was noted that the hotel’s board held a meeting on April 3, 2024, in response to a notice from Sun International Limited regarding an offer, duly acknowledging the proposal.
The notice read, “The Board convened an emergency meeting on April 3, 2024, to consider the notice from Sun International Limited and noted the offer.”
“The Board was informed that RFC had made a similar offer to other significant shareholders. The Board was informed and noted that Sun International Limited and other shareholders who are parties to Shareholders Agreements have complied with pre-emption provisions in those agreements. The Board believes the offer from RFC and ongoing arrangements among the shareholders are a golden opportunity to resolve legacy issues and positively impact the Company as a going concern.”
“As a result, and in accordance with Rule 17.18, Part II of the Rulebook of Nigerian Exchange Limited as amended, the Company wishes to inform the investing public that the Company entered a closed period from 1 January 2024 for purposes of filing its Audited Financial Statements for the year ended 31 December 2023. This closed period shall be re-opened twenty-four hours after the sale transactions have been completed, shares transferred to RFC limited on the trading floor, and notification of completion given to the Nigerian Exchange Limited and release of the Company’s outstanding financial statements to the public.”
What this means
- A move by Sun International Limited to sell 43% of its shareholding in the company, translates to a transfer of 21.2% shareholding in the hotel to Rutam Finance Company.
- Prior to the deal, Oma Investments Limited, owned an 18.1% shareholding in Federal Palace Hotel and Casino.
- While Sun International will remain the single majority shareholder in the hotel, a combination of Rutam Finance Company and Oma Investments Limited translates to combined shareholding of 39.3%.
- Ikeja Hotels Plc, another company linked to Oma Investments Limited holds a 12.2% shareholding in Tourist Company of Nigeria (Federal Palace).
What you should know
Recall that in 2018, Oma Investments Limited, the investment vehicle owned by the late Publisher, Alex Ibru acquired a 25.89% shareholding in Ikeja Hotels Plc. This has since increased to 26.19%.
In FY 2023, Federal Palace Hotel continued its run of losses with a loss after tax of N31.67 billion, representing an 89.6% decline from its 2022’s net loss of N3.21 billion. The group’s loss was majorly driven by a net FX loss of N30.26 billion.
Federal Palace Hotel closed 2023 with a negative equity of N7.78 billion, reflective of the dire financial challenges the hotel is currently facing.
