BHL to raise K62.4bn for hotel project
Blantyre Hotels Limited (BHL) plc, owners of Protea Hotel by Marriott in Blantyre Ryalls, has unveiled plans to raise K62.4 billion through rights offer to complete construction of the Lilongwe hotel project on time.
The four-star 180-bed golf estate hotel, situated on the Lilongwe Golf Club course and expected to be completed by August next year, is projected to enhance the capital city’s appeal as a prime location for business and leisure events across southern and eastern Africa.
In a published notice of an extraordinary general meeting to be held on October 4 to deliberate on the capital raising issue, the Malawi Stock Exchange-listed firm said at a board meeting on September 6 this year, the directors recommended that the firm raises further capital through rights offer to all members.
Reads the statement: “The capital to be raised is K62.4 billion or thereabouts as determined by the directors.
“If the said capital is raised, the company will have realised the means for completing the construction of a hotel property in line with its business expansion and growth strategy.”
A rights offer involves a company raising capital by offering its existing shareholders the opportunity to buy additional shares at a discounted price.
In the case of BHL, the present authorised share capital of the firm is K250 million divided into five billion ordinary shares of five tambala each.
The BHL board has, therefore, approved subject to the members’ approval, an increase in the authorised share capital to K500 million divided into 10 billion ordinary shares of five tambala each to cater for future capitalisation needs.
BHL has for years operated a single hotel in Blantyre and to expand its footprint into Lilongwe, the firm teamed up with other institutional investors to develop a hotel through a special purpose limited liability company Oasis Hospitality Limited.
Reads the statement: “When completed, the new hotel will be operated under a management agreement with Marriott International, Inc.
“It will carry the brand name Protea Hotel by Marriott. Marriott operates more than 6 000 hotels in 122 countries and territories.”
One of BHL individual shareholders, Joe Maere, earlier expressed hope that the steady progress of the project following the board’s determination guarantees an imminent rebound of the business.
“We are happy the board is positive and this means the project will be finished as soon as possible so that it starts to give benefits to shareholders,” he said.
Minority Shareholders Association of Listed Companies Central Region chairperson Purity Chitalo believes the hospitality firm will grow its overall profits through increased occupancy rates by combining its Blantyre and Lilongwe hotels.
“BHL Lilongwe hotel will be the only one with an active golf course access, as such, strengthening its attraction to the corporate world,” he said in an interview.
Ryalls Hotel general manager Farrukh Maqbool is quoted as having assured shareholders the satisfactory progress registered on the project, adding that it will be completed on time.
Equity Investment analyst Kondwani Makwakwa said in an earlier interview he expects the share value to gain in the medium-term from its current price of K13.05 per share.
BHL is 34.34 percent owned by Nico Life Insurance Company Limited, 32.15 percent by Africap LLC, 26.30 percent by Press Trust while the public owns 7.21 percent.
