The National Social Security Authority (NSSA) has asked mobile phone operator Econet’s appointed directors in Rainbow Tourism Group (RTG) to remain on the board until end of next month, as shareholders of the hospitality group struggle “to find a common position”.
NSSA is a major shareholder in RTG with over 40% equity in the hospitality giant.
Econet has three representatives on the board, Tracy Mpofu (board chairperson), Krison Charairo and John Gould.
RTG shareholders have disagreed on how the company should be recapitalised with property magnate Nicholas van Hoogstraten, who holds 36,5% shareholding, insisting the board should be dissolved as it had allegedly run down one of the country’s largest hospitality group by market capitalisation.
RTG wants to raise $15 million through a $10 million sale and lease of Rainbow Bulawayo Hotel and $5 million rights issue.
NSSA general manager James Matiza said RTG had engaged advisers to consult shareholders to find a common position.
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“As NSSA we cannot beg van Hoogstraten to engage us,” said Matiza. “RTG had engaged a consultancy company which will talk to shareholders and we are gradually coming to a common position and before the end of March we would have found common ground.”
RTG hopes to raise at least $2 million through the disposal of non-core assets, Touch the Wild, Hathanay Investments and Zimbabwe-Mauritius Tours and Travel trading as Tourism Services Zimbabwe.
“They (RTG) have property they decided to sell and retire short-term expensive debt. The amount raised from that will be part of the $15 million RTG wants to raise,” Matiza said.
He said RTG would deliberate on how much extra money would be needed after the disposal of the non-core assets.
Negotiations currently being brokered by a consultant will result in van Hoogstraten proxies on to the board. In previous shareholders meetings, the businessman failed to garner support for his nominees.
At a stormy annual general meeting in June last year, van Hoogstraten’s nominees — Shingirayi Chibanguza, Alexander Hamilton, Maximilian Hamilton and Ian Haruperi — did not garner enough support from shareholders to sit on the RTG board.
The businessman then declared he would not support any capital-raising initiative until RTG CEO Chipo Mtasa and the board leave.