11 Plc, formerly Mobil Oil Nigeria Plc, on Monday said it had finalised discussions with the Asset Management Company of Nigeria (AMCON) to acquire the Lagos Continental Hotel.
The company said this in a letter signed by its Managing Director, Mr Adetunji Oyebanji, to its shareholders, stakeholders and the general public, which was posted on the Nigerian Stock Exchange (NSE).
Oyebanji said that the acquisition, which would be done through its subsidiary, was subject to the terms and conditions agreed between the parties.
He said that the acquisition of the asset was consistent with its desire to diversify interests, given the current challenging environment in the downstream sector of the petroleum industry.
Oyebanji added that the company currently owns several prime properties in its real estate portfolio fully rented to blue chip tenants.
“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.
“11Plc 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, cash flow 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 takeover a smooth one,” he said.