eBusiness Weekly
Tawanda Musarurwa
HARARE – Rainbow Tourism Group (RTG) has announced that its rights and debenture offer aimed at raising $22, 5 million received a 57 percent subscription. The offers sought to mobilize capital to settle its debt and focus on long-term operations.
The hospitality group was aiming raise the capital after putting up 625 million shares on offer while debentures amounted to 1 974 354 839. In terms of the offer, the ordinary shares were up for subscription at a price of 0.93 cents per share, on the basis of one ordinary share for 2, 9928 shares already held.
Each rights offer share was tied to 2, 871 redeemable debentures with a subscription price of 0, 93 cents each at a coupon rate of 6 percent per annum. According to RTG, The average subscription to the offer saw shareholders taking up 353, 3 million shares while 1 million debentures were taken up, bringing in total $12, 72 million.
Underwriter, the National Social Security Authority (NSSA) took up the remainder of the shares and debentures that shareholders were not interested in, which basically means that the social security authority increased its shareholding in the group which had stood at 56 percent prior offer.
Prior to shareholders approved the offer last month, RTG had said the funds would be used to retire its debt of over $16 million owed to NSSA. The debt has been weighing down RTG’s financial performance.
RTG also sought to pay up facilities it accessed from local banks amounting to $2, 1 million and had Statutory obligations amounting to $8, 5 million as at June 30, 2017.
The group posted an after-tax loss of $4, 7 million for the year to December 31, 2017 up from a loss of $29 304 recorded in the prior year. The widening loss was largely on the back of decline revenues and retrenchment costs.
Revenue declined by 11 percent to $24 million in the period from $26, 9 million in the previous year.
