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Business Transcorp IPO Over Subscribed, Profits Expected to Exceed Turnover



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Transcorp Hotels plc will see its gross profits exceed current turnover in three years as it rides a wave of growth in Nigeria, Africa’s largest economy.

According to the company’s Chief Executive Officer, Valentine Ozigbo, its N8 billion initial public offering (IPO), currently open but set to close on October 17, is also becoming oversubscribed.

Transcorp Hotels is selling 800 million shares at N10 each, with UBA Capital acting as the lead issuer. The company has 7.9 billion shares outstanding, giving it a market value of N80 billion, BusinessDay says.

“The company will be growing very fast in the next couple of years and this will obviously be positive for capital appreciation and dividend payouts for our shareholders,” Ozigbo said.

“Our current growth assumptions are conservative and we see a growing demand for hotels, especially in the under-served Lagos market,” he added.

Transcorp Hotels makes up about 40-45 percent of parent Transnational Corp. of Nigeria plc group revenues of N21.21 billion for the six-month period ended June 2014.

The company plans to invest the proceeds of the IPO into a series a five-star, upper-market and middle-market properties the first of which will be two new hotels in Lagos and Port Harcourt at a cost of $140 million and $100 million, respectively

The Nigerian economy will expand at 7 percent this year, according to the World Bank in its 2014 Nigeria Economic Report.

Transcorp also plans to build a 5,000-capacity multipurpose convention and conference facility in Abuja, for which construction will commence soon.

#Nigeria #Transcorp #BusinessDay

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