Transcorp Hotels Plc will invest the proceeds of an 8 billion naira ($49 million) initial public offering into two new luxury Nigerian properties as the operator seeks to exploit a rise in international travel.

The company, which owns two hotels including the flagship Hilton Worldwide Inc. property in Nigeria’s capital, Abuja, plans to add two more in Africa’s biggest economy within the next three years, Chief Executive Officer Valentine Ozigbo said in a Sept. 19 interview in Lagos. Net income will probably increase to 7 billion naira in 2017 from 4.4 billion naira last year, he said

“The next three to four years would see our new hotels become operational and boost profit significantly,” Ozigbo said. “International travel arrivals into Nigeria have risen in the past few years, due to increasing economic activity in the financial services sector, telecommunications and construction industries.”

Transcorp Hotels will sell 800 million shares at 10 naira each to finance the development of a 300-room luxury hotel in Lagos, Nigeria’s commercial capital, and another 250-room property in the oil-hub city of Port Harcourt. The projects, which will cost about $500 million, will be funded by a combination of debt and equity, Ozigbo said. Rooms in the Transcorp Hilton Abuja range from about $400 to $3,600 per night, according to its website.

Hotels Growth

The Nigerian economy will probably expand at 6.75 percent this year, according to Finance Minister Ngozi Okonjo-Iweala. The nation is the most populous in Africa with about 170 million people and the biggest oil exporter.

Persistent deadly bomb attacks by Islamic militant group Boko Haram in the northeast of the country may deter some travelers, Roddy Barclay, a London-based analyst at consultancy Control Risks Group said July 31.

Transcorp Hotels, which accounts for about 40 to 45 percent of parent Transnational Corp. of Nigeria Plc revenue, is planning four more luxury hotels in the nation’s most populous and commercial cities after the existing developments, Ozigbo said. The number of hotels in the West African nation rose 88 percent to 6,200 in the two years through December, according to the country’s tourism development agency.

The Transcorp Hotels share offer is now open to investors and will close Sept. 30, Ozigbo said. Transnational Corp. shares have gained 32 percent this year, valuing the Lagos-based company at 223 billion naira.

To contact the reporter on this story: Emele Onu in Lagos at eonu1@bloomberg.net. To contact the editors responsible for this story: Vernon Wessels at vwessels@bloomberg.net. 

Photo Credit: The Transcorp Hilton Abuja hotel. Hilton Hotels