HomeNewsRTG in bid to raise $15m

RTG in bid to raise $15m

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The Rainbow Tourism Group (RTG) has appointed accounting firm PriceWaterhouseCoopers to handle bids for the disposal of the group’s non-core assets set to be concluded by year-end and still pursuing efforts to raise $15 million for recapitalisation.

RTG chief executive Chipo Mtasa early this week said: “The tender process is ongoing.
“We hope to conclude it before year-end. PriceWaterhouseCoopers are handling it. The response has been reasonable, but it is up to the board to assess.”

RTG plans to dispose Touch the Wild Private Limited, Hathanay Investments Private Limited and Zimbabwe Mauritius Tours and Travel Private Limited trading as Tourism Services Zimbabwe.

The performances of the companies were said to be weighing down the profitability of the company. Proceeds from their disposal will be channelled towards working capital.

Mtasa said RTG was still looking for $15 million for recapitalisation to retire its short-term debt and the completion of refurbishments projects.

She however said she could not comment on the $5,1 million that remains trapped in Renaissance Merchant Bank as the bank was still under investigations.

During the half-year ended June 30 2011, the city hotels contributed 74% to group revenue, while also making a 156% contribution in terms of operating profit.

Resort hotels provided an 8% contribution in the period under review from the 11% recorded in 2010.

The tourism sector is yet to hit 50% in average occupancy rates three years after the country dollarised.

Mtasa said the country started at 39% in average occupancy rate and in 2010 it was between 40-42% and now around 47%.

“We are still far from where we used to be and compared to South Africa which is at 60%.
We are really trying to hit 50% on the national average occupancy rate in hotels, ”she said.
The sector has been hit by challenges that include liquidity challenges and failure to access cheap loans.

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