By Bassey Udo, March 9, 2011
The Bureau of Public Enterprises (BPE) has reassured UnityKapital Assurance Plc that the federal government's plan to divest 24 percent of equity stake-holding in Transcorp Hilton Hotel will not jeopardise its investment interest in the company. UnityKapital's former managing director/chief executive officer, Mohammed Kari, had recently told reporters that the move to offload 24 percent of government's shareholding in Transcorp to workers was coming on the heels of an unresolved crisis relating to UnityKapital subsidiary, Capital Leisure and Hospitality, to acquire 15 percent stake of the company.
According to Mr. Kari, the investment interest, which was based on a Memorandum of Understating (MoU) signed with a former Transcorp management at the inception of the consortium, should have been one of the first considerations by BPE before going ahead with the plan to sell more shares to the public.
But BPE, through its spokesman, Chukwuma Nwokoh, pointed out that contrary to Mr. Kari's fears, the planned divestment of 24 percent of government's equity in the hotel would not affect any existing agreements among private shareholders who control majority stake of 51 percent in the company.
"We are aware of the comments credited to the immediate past managing director of the company relating to ongoing plans to sell 24 percent of government's equity in Transcorp to workers. There is no basis for any fear, as the exercise is going to affect only federal government's shareholding structure in the company, and not those of the private shareholders.
"BPE is not going to do anything that would negatively affect the interest of any stakeholder in the company. All existing memoranda of understanding (MOU) would not be affected, as those are issues for the private investors to handle. The exercise has nothing to do with former arrangements between UnityKapital and their partners which, we learnt, are about to be sorted out through arbitration," Mr. Nwokoh explained.
Mr. Kari had said the signing of the MOU by Transcorp and Capital Leisure followed the evaluation of the latter's chances, which was found to have been brighter than other bidders' interest in bidding for the hotel, adding that Transcorp had approached the management of Capital Leisure to seek its partnership in the bid process.
According to the former UnityKapital boss, one of the terms of the signed MOU was that Transcorp would provide funding for the bid and take over 51 percent equity offered by government, which would thereafter be shared between Transcorp and Capital Leisure on a 70:30 percent ratio respectively. However, Mr. Kari pointed out that no sooner had Transcorp raised the money and paid than it refused to honour the terms of the MOU, resulting in the ongoing litigation in court.
He expressed his frustration that BPE failed to listen to the pleas in its petitions and complaints demanding its intervention to help resolve the matter, adding that the company had to resort to the court when the management of Transcorp repeatedly failed to attend to its request or even acknowledge many of its letters on the issue.