Tinapa Calabar, an integrated business and leisure resort based in South Eastern Nigeria, is set to go private, following its inability to overturn a N18 billion ($113.5 million) debt.

Launched in 2007 as a trade, leisure and an entertainment hub for Africa, the resort – which is also Nigeria’s first free trade zone – has struggled to attract the necessary investment needed to offset its accumulating debt.

This has led oil-rich Cross River, a state in the country’s Niger Delta region and Tinapa’s primary promoter, to begin preliminary works that will offer a smooth handover of the resort to the Asset Management Corporation of Nigeria (AMCON) – managers of public/private sector non-performing loans and debts.

The state’s governor, Liyel Imoke, in a letter addressed to its legislature, indicated the desire of Cross River to shed most of its assets in the premier resort, following an agreement with AMCON.

“The Asset Management Corporation of Nigeria (AMCON) is set to take over the management of Tinapa Business Resort following a settlement agreement with the Cross River State government for the transfer of its controlling interests in Tinapa.

“By the agreement, AMCON is to buy back Tinapa’s debt totalling N18,509,744,797.05 [$113.5 million] and also provide the sum of N26 billion [$164m] for the revitalization and resuscitation of the Resort to reposition it as a private sector driven enterprise.”

The project’s failure to meet business expectations hampered its ability to attract sustainable investment. With alternative options explored and exhausted, a private sector driven equity investment and divestment of the state’s interests became the most feasible approach.