Court Stops Federal Place Hotel’s TCN’s Extraordinary General Meeting

The Board of Tourist Company of Nigeria (TCN) Plc has suspended the extraordinary general meeting of the company scheduled for the weekend after a shareholder obtained a court order to stop the meeting.

TCN owns Federal Palace Hotel & Casino, a luxury hotel based on Victoria Island, Lagos.

The meeting, which was scheduled for last Friday at Federal Palace Hotel, was suspended due to an order of interim injunction from the Federal High Court, which was served on the company.

In suit FHC/L/CS/260/2023 – Omamo Investments Corporation v. The Tourist Company of Nigeria & Others, the plaintiff had sought and obtained court order to halt the meeting.

Oma Investments holds 18.1 per cent material equity stake in TCN, the third largest equity stake. Sun International holds the largest equity stake of 49.3 per cent. Associated Ventures International controls 18.7 per cent equity stake while Ikeja Hotel, another quoted company holds 12.2 per cent.

“Consequently the notice of any subsequent EGM would be circulated to the shareholders of the company subject to the outcome of the hearing and determination of the motion for injunction,” the company stated.

The Board of TCN had called the EGM to seek shareholders’ approval for the restructuring of the company.

According to the notice, the directors were seeking shareholders’ authorisation to “consider, negotiate, agree and implement all such options for the restructuring of the statement of financial position of the company, including by way of an asset sale, share sale or such other capital injection that would maximise the interest of stakeholders inclusive of shareholders, creditor, employees, government, community and others”.

The meeting was also supposed to empower the board “to take all such actions and do all such acts, deeds, and things as they deem necessary to give effect” to the first resolutions, “including executing or authorising the execution of relevant documents and appointing any required professional adviser; and that all actions previously taken by the directors in that regard be and are hereby ratified”.

TCN has struggled in recent years with sluggish sales and higher expenses.

Full-year report of the company for the year ended December 31, 2022 showed that turnover rose marginally from N3.08 billion in 2021 to N3.98 billion in 2022. However, the company recorded operating loss of N677.4 million in 2022, as against N709 million in 2021. Loss before tax rose from N2.33 billion in 2021 to N3.2 billion in 2022. After taxes, net loss increased from N2.33 billion in 2021 to N3.21 billion in 2022.

The Nigerian Exchange (NGX) had placed TCN on delisting watchlist. According to the company’s record, on July 1, 2015, the NGX had notified the company of its intention to delist TCN due to the free float deficiency.

A board resolution was passed on July 13, 2015 authorising the delisting, and communicated in a letter to the NGX on July 20, 2015. The company sent a reminder to the NGX on April 27, 2016, but NGX responded on May 31, 2017 that the delisting had been placed on hold until the governance problems at Ikeja Hotel Plc have been resolved.

The board of the company stated that it would consider its options when the Ikeja Hotel Plc’s governance issues have been resolved, but assured that it would co- operate fully with the NGX on the way forward.