Roadwin Chirara/Eric Chiriga
FRENCH-BASED Hospitality Company Accor Afrique, previously the single largest shareholder in hospitality group Rainbow Tourism Group (RTG), with 34,20% has had its shareholding d
iluted to only 9% after the recently held rights issue.
Also diluted is Libyan-based investment company, LAAICO, which previously held 13,84% but had them reduced to below 4%.
The dilution of the two foreign companies’ interests in the RTG comes after they failed to exercise their rights to take up additional stock in the company during the floating of the billion- dollar rights issue.
RTG had gone to the market seeking to raise $80 billion towards recapitalising its operations.
Accor moved into the hospitality concern as a technical partner in 1999 in exchange for a significant shareholding in the company while the Libyan company had moved in as part of investment deals signed between the Zimbabwean government and the oil-rich state.
Chipo Mtasa, RTG group chief executive officer, confirmed the dilution of the two main shareholders’ interests in the group.
“The underwriters are not yet through with the figures after our successful conclusion of the rights issue, but I am aware that the two foreign companies did not exercise their rights during the rights issue,” Mtasa said.
She however said the company’s rights issue had successfully raised the targeted amount.
“We are totally happy with the results of the rights issue as we raised the targeted amount of $80 billion which will go a long way towards recapitalising the group,” said Mtasa.
She said the funds raised had mainly come from local investors with some part of the funds coming from new foreign investors moving into the group.
“There was overwhelming support for the rights issue from both local and foreign investors which enabled the group to be fully capitalise for the future,” said Mtasa.
She said the company was pleased with half-year performance which saw the company declaring an operating profit of $1,6 billion against previous losses of $1,3 billion in 2004.
“We are happy with the performance of the group considering the harsh economic environment that we are operating in,” Mtasa said.
However, the group remained heavily borrowed with expenses during the period under review of $5,3 billion whiles its turnover closed at $67 billion.
“We are addressing some of the group’s operational challenges which will likely reflect in the second half,” said Mtasa.
She however revealed that the group was not planning any retrenchments in the near future as it was putting the funds raised by the rights issue to work while it had only retained necessary staff.
“There will be no further retrenchments in the near future as the group has only retained a necessary staff complement to drive our operations forward,” Mtasa said.
RTG retrenched staff at its subsidiary, Touch The Wild, at a cost of $1 billion as part of its efforts aimed at reducing operational costs.
Mutasa said negotiations with Starwood Hotels with regards to the Sheraton Harare franchise were still underway.
“We are still negotiating the Sheraton franchise and hope to have it concluded soon,” said Mtasa.