Search Site: OnlineNigeria

Close



Okereke-Onyiuke, Dangote, Ovia, others buy NICON Hotel

Posted by From Mathias Okwe, Abuja on 2005/10/11 | Views: 1662 |

Popular Menu

Okereke-Onyiuke, Dangote, Ovia, others buy NICON Hotel


CHIEFTAINS of Corporate Nigeria yesterday emerged bid winners of the prestigious NICON Hilton Hotel, Abuja. Also, the country's insurance giant, NICON Insurance Plc, has been sold to a consortium of local companies.

CHIEFTAINS of Corporate Nigeria yesterday emerged bid winners of the prestigious NICON Hilton Hotel, Abuja. Also, the country's insurance giant, NICON Insurance Plc, has been sold to a consortium of local companies.

The hotel occupies an expanse of 199,500 squares metres of prime-value land. It began operations on April 14, 1987 with 670 rooms spread on 10 floors of the three-wing , 12-storey edifice.

With an offer of $105 million, (about N14.7 billion) for the Federal Government's 51 per cent equity holding in the hotel, the Nigerians defeated the former bid winner, African Properties Limited, which yesterday proposed to pay $87.5 million. It had in 2002 offered $61.71 million. The Bureau of Public Enterprises (BPE) yesterday said African Properties was unable to pay the earlier bid price as and when due, thus forcing the cancellation of that transaction.

For the current sale, the National Council on Privatisation (NCP) demands an initial 50 per cent bid purchase consideration ($105 million) within 10 working days from the date of official notification while the balance will be paid within the next 30 working days.

Some of the buyers who came together under a consortium or Special Purpose Vehicle (SPV) called " Capital Leisure and Hospitality Limited'' are : Dr. Ndi Okereke-Onyiuke, the director-general of the Nigeria Stock Exchange (NSE); Mr. Festus Odimegwu , the managing director of Nigeria Breweries Limited; Alhaji Aliko Dangote, chairman and chief executive of the Dangote Group; Mr. Jim Ovia, managing director of Zenith Bank Plc; Mr. Jacob Ajekigbe, the managing director of First Bank Plc and Mr. Tony Elumelu, the managing director of the United Bank for Africa (UBA).

Also on the list are oil magnate, Mr. Femi Otedola of Zenon Oil; the re-appointed chairman of the Nigeria Railway Corporation (NRC), Alhaji Waziri K. Mohammed; Otunba Funso Lawal; Tony Ezenna; Adegboyega Olulade and Nicholas Okoye.

The Nigerians are all directors of a subsidiary called Transcorp, a company that was incorporated with the objective of creating a globally competitive industrial conglomerate , which will supply world-class products and services to local and international markets. Transcorp was also created to respond to market opportunities that require heavy capital investment both in Nigeria and globally to reposition the country in Africa and the world at large.

Other companies in the Capital Leisure and Hospitality Limited are the Nigeria Social Insurance Trust Fund (NSITF); Kapital Insurance Limited; Harris Dredging Limited and Protea Hospitality Corporation of South Africa.

The first attempt to privatise the NICON Hilton Hotel in 2002 was not successful due to the inability of the preferred bidder to pay the purchase consideration. Thereafter, upgrading the extensive refurbishment work was carried out on the hotel in keeping with international standards .

The technical committee chairman of the NCP, Mr. Akin Kekere-Ekun yesterday stated that on resumption of the process in February, this year , the BPE sought and secured approval for the re- advertisement of the hotel for sale to prospective core investors, where 10 Expressions of Interest were received and eight of them were pre-qualified for the data room/due diligence.

Four of the eight pre-qualified investors submitted technical and financial proposals at the closing date for the receipts on August 17 this year and were duly evaluated in accordance with the criteria.

Kekere-Ekun, said that it was based on the technical proposals that the two firms: Capital Leisure and Hospitality Limited and African Properties Limited were pre-qualified for financial bidding.

The Director-General of the BPE, Mrs. Irene Chigbue yesterday stated that the NICON Hilton Hotel remained the flagship of hospitality industry not only in Abuja but also the whole of Nigeria.

She noted that the hotel derived its patronage largely from the high segment of the society in government, business community and diplomats and that the occupancy rate in the hotel grew steadily from 47 per cent in 1996 to 57 per cent in 2000 and had attained a cumulative 58 per cent room occupancy rate.

Meanwhile, Nigeria's insurance giant, NICON Insurance Plc, was also yesterday sold to Assurance Acquisition Limited, a company formed by Afribank Plc, the Nigeria Social Insurance Trust Fund (NSITF) and other firms with government interests for $46.8 million of the Federal Government's 70 per cent equity in the insurance company.

The Assurance Acquisition Limited beat three other pre-qualified bidders : Industrial and General Insurance (IGI) Company Limited, which offered $26.1 million to become the reserve bidder; Zenith General Insurance Company, which bidded to pay $17.28 million and CCNL Investors Limited with its lean offer of $2 million.

The NCP, which Monday raised the government's equity to be divested from 51 per cent to 70 per cent, had also disqualified the SPV for the Management Buy Out of the NICON Insurance Plc management- Garston Derek-Jones Nigeria Ltd to end its run from the corporation's on-going privatisation race.

The decision to disqualify the NICON Management Buy-Out was reached at the meeting of the NCP in Abuja where the withdrawal of N150 million from the pension fund of the corporation was discussed.

Garston-Jones has been swimming in troubled waters following the several crises between the management and the unionised staff.

Petitions have also been sent to the NCP, the BPE and the Economic and Financial Crimes Commission (EFCC) by the unions over alleged fraudulent practices.

The latest is the one intimating the BPE of the alleged withdrawal of N150 million from the pension fund of the corporation by the management to submit the mandatory $1 million bid bond expected of prospective investors angling for the 51 percent equity of government in the corporation.

Sources at NICON said that Prisca Soares, the managing director, called a meeting where she broke the news of the disqualification by the NCP.

The privatisation of NICON was slated for the second phase of the privatisation exercise programme of government but was aborted in 2002 by a court injunction. The suit has long been withdrawn.

The NCP yesterday stated that the NICON Insurance transaction would come to a close with the signing of the share purchase agreement and that the payment mechanism would be initial 10 per cent of the purchase consideration within seven days of consideration from the date of official notification and the balance of 90 per cent to be paid within 30 working days from the date of official notification.

Read Full Story Here.... :
Leave Comment Here :