Transcorp Hotels to Sell Off Transcorp Hotels Calabar After N269m Loss

By Dipo Olowookere

The board of Transcorp Hotels has been given the go-ahead to offload all the company’s stake in loss-making Transcorp Hotels Calabar Limited.

The company’s subsidiary in Cross River State has not been profitable, and shareholders are growing impatient with the development.

At the Annual General Meeting (AGM) of Transcorp Hotels last Monday in Abuja, shareholders authorised the board to sell off the company’s 100 per cent stake in the entity because it was not making a positive contribution as expected.

In a notice filed to the Nigerian Exchange (NGX) Limited, Transcorp Hotels confirmed that this was one of the resolutions passed at the yearly gathering.

The hospitality firm stated that participants at the meeting agreed, “That the company be and is hereby authorized to dispose of its 100 per cent equity interests in Transcorp Hotels Calabar Limited in accordance with relevant laws, statutes, and regulations.”

Business Post reports that in the 2022 accounting year, Transcorp Hotels Calabar recorded a N269.3 million loss compared with the N3.5 million loss in the preceding year, though revenue improved by 16.73 per cent to N1.0 billion from N858.4 million reported in 2021.

The cost of sales grew by 16.66 per cent to N350.5 million from N300.5 million in 2021, while operating expenses rose to 37.48 per cent to N766.7 million from N557.7 million.

As of last December, the worth of Transcorp Hotels in the business was around N3.50 billion, but it is not certain if a buyer would be willing to pay this amount for a venture making such losses.

But the shareholders of Transcorp Hotels are resolute and have mandated the board to let go to enable them to enjoy a better return on investment.

In the 2022 fiscal year, Transcorp Hotels only paid out 13 Kobo as dividends, and the cash reward was paid to investors whose names appear on the company’s register of members as of the close of business on March 17, 2023.

If the sale of Transcorp Hotels Calabar Limited, which has 132 rooms, two meeting rooms and one restaurant, scales through, Transcorp Hotels Plc would be with Transcorp Hilton Abuja, Transcorp Hotels Port Harcourt Limited, Transcorp Hotels Ikoyi Limited, and Aura by Transcorp Hotels Limited.