By Kingsley Jassi:
The annual performance of Malawi Stock Exchange-listed Blantyre Hotels Limited (BHL) will not be as rosy as earlier indicated in the rights offer prospectus.
This comes as the firm has revised its loss-after-tax projection upwards by about 102 percent.
The company, which owns Ryalls Hotel and is developing a four-star outfit in Lilongwe, says its before-tax profit is expected to be in the region of K580 million to K700 million.
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This is lower than the K1.3 billion it projected before tax and finance costs when it was wooing investors into buying its offered shares.
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“Due to the finance charges incurred on the obligations for the Lilongwe Hotel project and not from the Blantyre Ryalls Hotel operations, BHL is expected to register a consolidated loss-after-tax for the year ending 31December 2024 ranging from K1.7 billion to K1.85 billion,” the statement reads.
This represents an increase of between 85 percent and 102 percent from the projected loss-after-tax and finance costs of K918 million as indicated in the rights offer prospectus for the same period ending 31 December 2024.
In explaining the lower than earlier projected performance, the company cites the inclusion of the expected financial loss registered by Oasis Hospitality Limited, whose results have been consolidated because the expectation is that Oasis will become a subsidiary of BHL at the conclusion of the ongoing rights issue offer.
“BHL is expected to incur more expenditure than was projected due to activities related to the ongoing rights issue offer,” the statement adds.
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Minority Shareholders Association of Listed Companies Secretary General Frank Harawa described the outturn as unfortunate.
The company is looking for up to K62.4 billion for the completion of the Lilongwe project located at the upmarket site within Lilongwe Golf Club and has already secured a partner in Protea Hotels as the operator of the hotel.
Through the rights offer that opened on November 25 and closed on December 6, the firm is to raise the amount for the remaining cost of the project, which is scheduled to complete in 2026, offering 180 rooms.
