L-R: Executive Director, Pascal Demarchi; Company Secretary, Alex Ugwuanyi; Non-Executive Director/Alternate Chairman, Paul Chukwuma Obi and Managing Director, Ravi Bachu, during the meeting at Abuja Continental Hotel.
Shareholders of Capital Hotels Plc were ecstatic at the weekend as they hailed the positive performance and transformation by the new management of Abuja Continental Hotels since taking over last year.
The shareholders who spoke at the 42nd Annual General Meeting of the company in Abuja said the acquisition of majority stake in Capital Hotels by 22 Hospitality Limited, which led to the emergence of a new management of the former Sheraton Hotels in September 2022, has brought a new lease in the hospitality business.
Prior to the emergence of the new management, Sheraton Hotels was managed and operated by Marriott International (owners of Starwood Hotels & Resorts Inc) under an Operating, System and Centralised Services Agreements.
The agreements, which subsumed the previous agreements between Capital Hotels and Sheraton Overseas Management Corporation, did not impact significantly in the fortunes of the hotel.
However, at the AGM on Wednesday, the first since the new management took over, most shareholders who spoke described the arrival of the new management as a dream come true, as the hotel has witnessed significant turnaround in most aspects of its operations in the last one year.
The Chairman of Noble Shareholders Association of Nigeria, Chief Innocent Nwokocha Peters, who was the first to speak, said the management of the hotel has given shareholders enough reason to hope for better days ahead.
“The massive rehabilitation of the Abuja Continental Hotel is gradually bringing more life in the hospitality firm, even as the popular events centre in the iconic hotel is coming up alife again,” Peters said.
Also, he said another plus for the new owners of the company was the clearing of all outstanding gratuities and benefits of former employees, while new staff have been given better contracts and improved conditions of service.
He acknowledged the huge losses incurred by the company under the previous management during the 2022 financial year, saying the situation has significantly improved under the new owners.
“The difficult experience during the takeover of the company by the new owners was clearly understandable, in view of the deplorable state of the hotel and the huge resources spent on the rehabilitation of the hotel to bring it back to standard, can only be described as commendable,” Peters added.
For the President of Capital Shareholders Association, Chief Augustine Ekechukwu, 22 Hospitality Limited, which is the new management and core investor/majority shareholder in the hotel, deserves high commendation for the rising improvement and peerless services being rendered by the hotel in recent times.
Ekechukwu said the transformation in the fortunes of the hotel in the last one year was not a fluke, as the parent company of the new investor – NIPCO Investment, had made dramatic positive changes in 11Plc since it also acquired the former Mobil Oil Nigeria Plc.
Although he said the turnaround in Abuja Continental Hotel was yet to attain its peak, Ekeechukwu pleaded with shareholders and other investors, particularly the minority shareholders of Capital Hotel Plc, to exercise patience, as he was confident more improvements in the hotel would soon translate into more clients and subsequently more revenues for investors.
In his response, the Chairman of the meeting, Paul Chukwuma Obi, a lawyer and non-executive director, who stood in for Capital Hotel Plc Chairman, Ramesh Kansagra, assured shareholders that the noticeable improvement in the fortunes of the hotel was an indication that the new owners of the company were in for serious business to bring back the better days.
“The dream of having the company to begin to pay dividends to investors will soon come after over five years. The new management is focussed and committed to continue the acquisition of assets to consolidate and expand the company’s portfolio from oil and gas to the hospitality and estate businesses. A lot of resources are being deployed to revitalise the company and set it on the path of sustainable growth,” he said.
Obi assured shareholders that they would not regret the decision by 22 Hospitality Limited to acquire majority stake in the company and the subsequent change in top management.
“We did the same with our acquisition of a 60% equity stake of ExxonMobil in Mobil Oil Nigeria Plc, and today the company and its esteemed shareholders are the better for it.
The share price in the stock market has not only gone up, the infrastructure upgrade in the hotel has created new business opportunities for fresh investments, such as the establishment of an LPG plant, re-entry into the aviation fuel business, etc.” he said.
He said he has no doubt that a similar positive growth in the 11Plc investment would be replicated in Abuja Continental Hotel, as the management and employees were well focussed and committed to stellar service delivery to its customers.
The Chairman allayed fears by some minority shareholders that they would not receive meaningful benefits from their investments, assuring them of prospects for easy exit, if they would decide to divest their interests.
Although he said called for caution among shareholders to think properly before deciding to divest their shares, he said the new company has a solid pedigree and capacity to turn things around for its investors.
In his statement at the meeting, the Chairman said in his Annual Report and Financial Statement for the year ended December 31, 2022 that COVID-19 pandemic took its toll on businesses in Nigeria during the year, especially in the hospitality sector, where travel demands were significantly curtailed, as the Nigerian economy struggled on the brink of a recession.
He expressed concern over high headline inflation rate in the economy, which made achieving the 17.6 percent inflation rate target a difficult task.
During the year, the Chairman said Capital Hotels Plc posted an average top-line result, with its turnover rising from N3.83 billion in 2021 to N5.33 billion in 2022, while cost of sales fueled by cost of restructuring rose to N5.83 billion from N3.27 billion in 2021, resulting in a loss for the year.
Despite the bad operational environment during the year, the Chairman said net assets of the hotel increased by 75.2 percent to N24.99 billion in 2022, mainly due to the share premium that rose from the new shares alloted to the majority shareholders during the year.
With a new government expected to be inaugurated in May 2023, the Chairman said new economic policies would likely emerge to give the company a reason to look forward to new ways to tackle rising inflation, national debt profile and debt servicing burden, especially the depreciating value of the Naira.