RTG seeks US$15m for recapitalisation

statement accompanying its financials for the half-year ended June 30, RTG chairperson Mrs Tracy Mpofu said the group had not been adequately recapitalised since dollarisation as it relied mainly on loans.
Some of the projects earmarked by the group include refurbishment of its flagship Rainbow Towers Hotel and Conference Centre and the construction of a four-star hotel in Beitbridge.
“The group has not been capitalised since dollarisation and has relied on loans to fund working capital requirements as well as undertake the capital projects,” said Mr Mpofu.
The group requires recapitalisation for the purpose of completing the projects and retiring short-term debt . . . this will be done through rights offer.”
Mrs Mpofu said the refurbishment of Rainbow Towers, which accounts for 40 percent of the group’s revenue, commenced in April and duty exemption on capital goods for tourism industry would benefit the project.
The construction of Beitbridge hotel would commence mid-next year. The group completed the refurbishment of A’Zambezi River Lodge in Victoria Falls to the tune of US$4,8 million and it was reopened in May.
Rainbow said it has engaged Renaissance Merchant Bank, currently under curatorship, with regard to its US$5,4 million held by the bank.
“Indications are that the group will recover the funds, hence provision has been made for this amount in the financial statement.”
In the six months to June, the group realised a profit of US$1,2 million from US$112 000 achieved during the same period last year.
Revenue was up 32 percent to US$13,8 million from US$10,5 million a year earlier. Occupancies increased by 1 percent to 41 percent from 40 percent while the average room rate grew to US$68 from US$67 for the same period last year.
The group is set to sell its non-core assets, which are weighing down the group’s profitability.
It is expected that the disposal will be concluded this year and the proceeds would be channelled towards product upgrade and working capital.
Going forward, RTG expects that the positive performance during the first half would be sustained.