Ikeja Hotel has reacted to a report that the Lagos State Government has revoked the right of occupancy of one of the company's hospitality business, Sheraton Hotel. AllNews had reported that Ikeja Hotel is in a faceoff with the state government over land that could cost the company NGN4.63 billion.
The company had announced in a statement seen by AllNews that its right of occupancy on one of its properties was revoked, leading to some media outlets reporting that the affected property was Sheraton Hotel. However, AllNews reported that the property in question was the one located at Opebi Gorge.
While confirming the AllNews report in a statement, Ikeja Hotel said the revocation has nothing to do with Sheraton Hotel, "It has come to our notice that our statement to the Nigeria Stock Exchange in our bid to provide the market with full information on the developments in our Group was misconstrued and misinterpreted by some sections of the Press.
"Please note that our Press Release on November 3, 2020, to the Exchange, is to disclose that the land in Opebi Gorge belonging to Charles Hampton Limited which is a subsidiary of Ikeja Hotel Plc, is the land in question. The Notice of Revocation from the Lagos State Government on the said land in Opebi Gorge has nothing to do with Sheraton Lagos Hotel nor the land on which the Hotel is situated."
Ikeja Hotel has taken legal action against the state government, but if it loses the court battle, the revocation has the potential of the company N4.63 billion.
Why Lagos State Revoked Ikeja Hotel's Right Of Occupancy?
There are several reasons a state government could revoke the right of occupancy of a business or individual. In the situation of the Ikeja Hotel, according to findings by AllNews, Country Hills Attorney stated that the following could trigger the revocation;
(1). Revocation on grounds of breach of the provisions contained in the certificate of occupancy. See Section 28(5)(a) Land Use Act.
(2). Breach of terms contained in the certificate of occupancy or any special contract made under section 8 of the Act. See Section 28 (5) (b) Land Use Act.
(3). Revocation on grounds of refusal/neglect to accept and pay for a certificate issued in evidence of a right of occupancy. See Section 28(5)(d) Land Use Act.
Ikeja Hotel's Battle To Exit Financial Crisis
AllNews had reported that the company recorded a loss of NGN404.1 million in three months of Q3 2020, outlining the disastrous performance of the company this year. Also, AllNews gathered that Ikeja Hotel revenue fell by -78.9% as the company generated NGN697.1 million in Q3 2020, failing to surpass the NGN3.3 billion revenue generated in the same period last year.
During the same period ended September 2020, Ikeja Hotel recorded a NGN1.4 billion loss after tax, worsening the financial crisis the company is currently in. The poor outing of the company in 2020 - which is due to the COVID-19 pandemic, which led to about four months lockdown of the hospitality business - will cost shareholders dividends this year, as Ikeja Hotel stated that the pandemic will likely affect declaration of dividend.