Sun International Limited, a renowned South African hospitality group, intends to offload 43% of its stake in Tourist Company of Nigeria Plc, the entity behind the Federal Palace Hotel and Casino.
The decision was disclosed through a notice obtained by Nairametrics, indicating Sun International’s plan to divest a significant portion of its 49% ownership in Federal Palace Hotel and Casino to Rutam Finance Company. Rutam Finance Company, an affiliate of Oma Investments Limited and an existing shareholder in the Tourist Company of Nigeria Plc, is set to acquire the shares.
Lovelyn Aniekwe, TCN’s Company Secretary, confirmed in the notice that the hotel’s board convened on April 3, 2024, to deliberate on Sun International’s offer. The board duly acknowledged the proposal and recognized similar offers extended by RFC to other major shareholders. It was emphasized that Sun International Limited and other shareholders have adhered to pre-emption provisions in existing shareholder agreements.
Aniekwe further stated, “The Board believes the offer from RFC and ongoing arrangements among the shareholders are a golden opportunity to resolve legacy issues and positively impact the Company as a going concern.”
In compliance with the rules of the Nigerian Exchange Limited, TCN has entered a closed period since January 1, 2024, in preparation for filing its Audited Financial Statements for the year ended December 31, 2023. The closed period will conclude twenty-four hours after the sale transactions, the transfer of shares to RFC Limited, and notification of completion provided to the Nigerian Exchange Limited.
This strategic move by Sun International to divest 43% of its shareholding equates to a transfer of 21.2% of the hotel’s ownership to Rutam Finance Company. Before this transaction, Oma Investments Limited held an 18.1% stake in Federal Palace Hotel and Casino. While Sun International will retain its position as the majority shareholder, the combined ownership of Rutam Finance Company and Oma Investments Limited will amount to 39.3%.
Additionally, it’s worth noting that Ikeja Hotels Plc, associated with Oma Investments Limited, holds a 12.2% stake in the Tourist Company of Nigeria (Federal Palace).
In related developments, Oma Investments Limited, owned by the late Publisher, Alex Ibru, acquired a 25.89% shareholding in Ikeja Hotels Plc in 2018, which has since increased to 26.19%.
Federal Palace Hotel endured another challenging fiscal year in 2023, reporting a significant loss after tax of N31.67 billion, marking an 89.6% decline from the previous year’s net loss of N3.21 billion. The considerable loss was primarily attributed to a net FX loss of N30.26 billion. Furthermore, the hotel concluded 2023 with a negative equity of N7.78 billion, reflecting its current financial difficulties.
