Former MRS PLC, 11 plc, said it has finalized discussions with the Asset Management Company of Nigeria (AMCON) to acquire the Lagos Continental Hotel through its subsidiary company.
In a statement issued by the company, the acquisition is subject to the terms and conditions agreed between the parties.
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.
The move is part of its plans to diversify its revenue stream. The company explained that 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.
11 plc plans to partner with a major international brand to provide world class service synonymous with all our operations. The company notes that the asset will require significant investment to raise its standard from the current state to the levels consistent with similar facilities in major cities around the world.
“Finally, we would like to assure our numerous stakeholders that we remain committed to delivering outstanding value and robust returns in the years ahead. However, in the short term, cashflow and EBITDA could be under strain as a result of funds needed to renovate and upgrade the hotel to attract a 5 Star branding. 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,” the company said.