Lagos Sheraton To Lose N4.63bn Over Planned Revocation of Right of Occupancy
Ikeja Hotel Plc, owners of Sheraton Hotel, has disclosed that the purported revocation of the company’s right of occupancy on its landed property situated at Opebi Gorge, Ikeja, Lagos, has the potential to impair the assets of the Group to the tune of N4.63 billion if the government succeeds.
This was disclosed Wednesday by the Management of Ikeja Hotel Plc in a press release sent to the floor of the Nigerian Stock Exchange.
“The Company received a letter dated October 15, 2020, from the Lagos State Government, purportedly revoking its right of occupancy on its land situated at Opebi Gorge, Ikeja, Lagos. The Company has taken legal action to contest this revocation. However, the revocation has the potential to impair the assets of the Group to the tune of N4. 63 Billion if the government succeeds,” the press release partly reads.
According to the company, the profitability of the company is expected to suffer and wreak economic havoc on its core business segment.
Hence, the revenue-generating capacity of the company would be constrained, as it recovers from the effects of the COVID-19 pandemic.
Due to the continued effects of the COVID-19 pandemic, the company recorded a loss after tax of N1.4 billion in the third quarter of 2020.
The current reality is likely to affect the dividends accruable to the shareholders of Ikeja Hotel Plc, as the company may not declare dividends for the year ended December 31, 2020.