February 25, 2011
The decision of the Federal Government to divest 24 percent of its 49 per cent equity shareholding in Transcorp Hilton Hotel, Abuja, by way of an Initial Public Offering (IPO) not later than September 2011 confirms what has been known in the market about the value of the Transcorp Hilton brand under the current management.
According to the statement issued on Thursday from the Ms. Bolanle Onagoruwa led BPE, government acknowledged the need to reduce waste in public enterprises and also pursue an economic empowerment programme for its citizenry through viable companies that lend credence to the privatization exercise.
The BPE director general, who was represented by the Bureau’s Acting Director of Mines and Steel Development, Mr. Baba Mohammed, commended the management of the hotel for its performance since the core investor sale in 2005 and added that the divestiture strategy would also create market liquidity for investors in the company, given its above industry average performance.
“With the outstanding performance, the National Council on Privatisation (NCP), through the BPE, deemed it appropriate to divest 24 per cent out of the outstanding FGN’s 49 per cent shares in the company to the general public,” she said.
Transcorp Hilton Hotel began operations on April 14, 1987 as NICON Hilton Hotel out of the determination by NICON Insurance Corporation to aid the development of the hospitality industry in Abuja. The hotel never made any appreciable impact until 2005 when 51 per cent of its shares were sold to Capital Consortium/Transnational Corporation Plc (changing its name to Transcorp). The remaining 49 per cent was retained by the Federal Government until such a time it was sure that a credible management was in place to ensure its sustained viability.
It is understood that 10 per cent of the shares under the IPO sale will be offered to the staff of Transcorp Hilton, as an incentive to the workforce and ensure continued commitment to work.