The Rainbow Tourism Group (RTG) expects to complete recapitalisation of the group in the first quarter of this year, as the interest burden continues to weigh down on the business.
The hotel group embarked on a $15 million recapitalisation exercise last year to retire its short-term debt and complete refurbishments projects.
Finance director Paschal Changunda said: “The recapitalisation process is still going on. An engagement with relevant stakeholders is underway and once this is through the market will be informed.”
Changunda said the company was neither technically insolvent nor in the process of being liquidated.
“The company is transacting normally and operations are actually profitable. However, the interest burden continues to weigh the company down and this is part of the reason we want to recapitalise.”
He said the group’s position had not depreciated from the 2011 half-year results although Changunda could not disclose figures as the company was in a closed period.
During the half-year ended June 30 2011, total current liabilities at $17 050 647 surpassed total current assets of $15 925 420.
He said the company had set its eyes on increased volumes throughout the year.
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Changunda said during the 2011 festive season RTG recorded an improvement in occupancies compared to the previous year with resort hotels busier than city hotels.
The tourism sector is yet to hit 50% in average occupancy rates three years after the country dollarised.
The company started at 39% in average occupancy rate and in 2010 it was between 40-42% and is now around 47%.
