Transcorp Hotels float N10 billion bond issues to investors

By Helen Oji   |   01 November 2015   |   11:13 pm  

Transcorp- image source marcopolos21

Transcorp- image source marcopolos21

Transcorp Hotels Plc has announced a successful naira bond market transaction, worth N10 billion to boost its operations.

Specifically, the proceeds of the issue, according to the bank, will be used to finance the upgrade of the company’s flagship Hotel, Transcorp Hilton Abuja, and construction of a multipurpose banquet centre.
 
The bank explained that the transaction is a seven-year fixed-rate bond due in 2022 under a N30 billion medium term bond programme.
The subscription consists of N10 billion in Series 1 in a Senior seven -Year 16.00 per cent Fixed Rate (Unsecured) Bonds Due 2022. The Series 1 Bonds are fully underwritten by FSDH Merchant Bank Limited and United Capital Plc. 
 
The new bonds will carry a gross coupon of 16.00 per cent yearly (amortised) for a period of seven years. The redemption on maturity, expected to be 2022, will be at 100 per cent of the nominal amount of the Bonds.
 
The Bonds are available in denominations of N1,000, and will be listed on the main market of the Nigerian Stock Exchange and also the FMDQ OTC platform for enhanced tradability with FSDH Plc as the lead issuing house, while United Capital Plc and Stanbic IBTC Capital Limited are joint issuing houses. FSDH and United Capital Plc are the joint underwriters on the Transaction.
 
The Chief Executive Office of Transcorp Hotels Plc, Valentine Ozigbo explained that the transaction represents part of the financing of the upgrade of the Transcorp Hilton Abuja and the development of a 5,000-seater multipurpose Banquet centre.

“The availability of funds enables us to enhance our financial flexibility by diversifying our sources of funding while significantly extending the maturity of the Group’s funding and ensuring optimal capital mix. We are delighted by the investor reception for Transcorp Hotels in the bond markets” .

The company held a signing ceremony in Ikoyi, Lagos to mark the issue of Series 1 seven -Year 16.00 per cent Fixed Rate (Unsecured) Bonds.  The company has secured Securities and Exchange Commission (SEC) approval as well as a certificate of “PENCOM Compliance” to enable participation by the Pension Fund Administrator (PFA) community, as one of the target investors in the bond.

Meanwhile, TransNational Corporation of Nigeria, has posted gross earnings of N2.27 billion (company) in its nine months operations, against N1.12 billion achieved in the corresponding period in 2014.

Specifically, its unaudited result for the nine months ended September 30, 2015 showed a profit before tax of N1.24 billion, compared to loss after tax of N1.36 billion in 2014.

Total asset of the company also stood at N54.06 billion compared to N54.24 billion for full year 2014.

The Chief Executive Officer of Transcorp Plc, Emmanuel N. Nnorom explained that the performance over the past nine months reflects the stability that has been injected into the Group’s corporate strategy since 2011, particularly in light of the challenging business environment.

“Power remains a key part of our business contributing 65 per cent of revenue. The diversification of our business lines provided stability and reflects the payoff of our investments in world-class human capital.

We expect significant improvement in the power sector in the coming weeks, as this accounts for a significant part of our turnover, “he added.



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