HomeNewsRainbow Tourism Group tackles debt

Rainbow Tourism Group tackles debt

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RAINBOW Tourism Group (RTG) chairperson Joseph Kanyekanye says the hotel group has what it takes to turnaround its fortunes and return to profitability by the end of next year.

Report by Mernat Mafirakurewa

Addressing a Press conference in Harare on Monday, Kanyekanye said RTG had set in motion plans to deal with the short-term debt. During the half-year ended June 30, the group registered a pre-tax loss of $2,3 million.

“It goes without saying that in the last couple of years it has not shown that it can punch above its weight, notably the fact that we were not posting profit and that there were issues of shareholder squabbles that you are familiar with,” Kanyekanye said.

“The sum total of it is that we have gone behind that. We want to build a new hotel. We need a fresh approach to doing business. As a board, we see growth potential in the sense that in terms of real asset value RTG is probably second to none.”

He said the board was in the process of dealing with the debt issue. The hotel has been desperately trying to raise $15 million to recapitalise and to retire short-term debts.

“What I can say without fear of contradiction is that $10 million of that is already done.We have already gone through the process,” Kanyekanye said.

Kanyekanye said the board had recieved the necessary pre-approvals ahead of its forth-coming annual general meeting.
“So I am sure the debate whether or not we will do it, ends today. This is a done deal.”

He said it was critical for the group to drive hotel revenues while also pushing costs down it in order to return to profitability.
“I want to put it categorically that by 2013, we should be able to hand you a profitable hotel,” Kanyekanye said.

“There is a strategic plan that we have put in place . . . I expect that within 10 days it should the new CEO’s input and we must begin to implement it. Implementation of the strategic plan will be anchored on a strict no-nonsense approach.”

As part of efforts to contain costs, RTG plans to layoff close to 200 employees at a cost of $80 000 within three months.

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