11 Plc, the sole authorized distributor of Mobil fuel and lubricant brands in Nigeria, has finalized discussions with the Asset Management Company of Nigeria (AMCON) to acquire the Lagos Continental Hotel, according to a statement released on Monday. The company said it has notified its shareholders, stakeholders, the Nigerian Stock Exchange (NSE) as well as the general public about the acquisition, which is subject to the terms and conditions agreed between the parties.
The 5-star Lagos Continental Hotel, formerly known as InterContinental Hotel Lagos, was open for business in September 2013. It was deflagged in January 2018 and rebranded to Lagos Continental Hotel following the exit of United Kingdom-based Milan Group, which previously owned the property. The hotel subsequently went into receivership following a court order that allowed now-defunct Skye Bank to take over the property, over debts of $29.8 million and N3.8 billion owed to the bank.
In a statement signed by Adetunji Oyebanji, Managing Director/CEO of 11 Plc, the company said it plans to partner with a major international brand to provide world-class hospitality services. The company also said the property will require significant investment to raise its standards to the levels that are consistent with similar facilities in major cities around the world.
“11 Plc currently owns several prime properties in its real estate portfolio fully rented to blue chip tenants and the acquisition of this asset is consistent with our desire to diversify our interests given the current challenging environment in the downstream sector of the petroleum industry,” 11 Plc said.
“Fuel margins in the industry have remained stagnant for several years in the highly competitive and regulated industry. We anticipate that this asset will contribute positively to earnings and underlines the faith of its stakeholders in the future of the Nigerian economy.”
The acquisition of Lagos Continental Hotel is being made through a subsidiary of 11 Plc.
11 Plc assured its stakeholders that it remains committed to delivering outstanding value and robust returns in the years ahead.
11 Plc, formerly Mobil Oil Nigeria Plc, however, disclosed that its cashflow and earnings before interest, tax, depreciation and amortization (EBITDA) in the short term could be under strain as a result of funds needed to renovate and upgrade the hotel.
“We also like to assure the employees of the hotel that they will be treated with the utmost dignity and respect during the transition and seek their cooperation to make the take over a smooth one,” 11 Plc noted.