Transcorp Hotels floats second tranche of N30b expansion bond
Transcorp Hotels Plc – the hospitality subsidiary of Transnational Corporation of Nigeria Plc (Transcorp Plc), at the weekend, floated the second tranche of its N30 billion bond for its expansion programme.
The announcement was sequel to the capital market regulatory authorities’ approvals and a successful completion board meeting on the issue by the company in Abuja.
Essentially, this second tranche issue transaction was projected to raise N9.758 billion, to finance the upgrade of the company’s flagship hotel, Transcorp Hilton Abuja, and other buildings, including construction of a 5,000 seater multipurpose banquet centre.
The Managing Director and Chief Executive Officer of Transcorp Hotels Plc, Valentine Ozigbo shed light on the terms and particulars of the bond : “ The transaction is a five-year fixed-rate bond, due in 2020. The subscription is in addition to a prior issue of N10 billion, being series 1 in a senior seven-year 16.00 per cent fixed rate (unsecured) bonds due 2022, issued in October 2015. With this, the total amount the company has successfully raised to date is N19.758 billion.”
He continued : “ The series 2 bond will carry a gross coupon of 15.50 per cent per annum for a period of five years. The redemption on maturity, expected to be 2020, 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. FSDH Plc is the lead issuing house, while United Capital Plc and Stanbic IBTC Capital Limited are joint issuing houses.
“We are embarking on a full renovation of the historic Transcorp Hilton Abuja and its 670 rooms and on-site facilities. This is the first major renovation of the historic Transcorp Hilton Abuja for the first time in its 30-year history, save for a minor one ten years ago. This bond issue will finance the upgrade, new hotels and the development of a 5,000-seater multi-purpose banquet centre here .
“This is the completion board meeting signing ceremony for tranche 2 of our bond. If you recall, few months ago, we launched a N30 billion bond programme out of that we did the first issue of N10 billion, in October and it was fully underwritten, so we secured the first N10 billion and we started the second tranche which is for another N10 billion. But this time through book building which is where we reach out to investors to indicate what they are interested in investing in and at what terms.
“ Eventually, we would see the best offers and see whether we have gotten what we require and then we close our bid. We did that and I am glad to say that we have been successful because we received up to N9.75 billion out of the N10 billion.”
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