Rainbow Tourism Group rights offer 57 percent subscribed

Rainbow Tourism Group shareholders bought 56.52 percent of the hotelier’s rights offer and linked debentures aimed at raising $22.5 million to restructure its balance sheet and lower debt.

The company issued 625 million shares and 1.79 million linked debentures for the capital raise initiative. The remaining 43.48 percent was taken by the underwriter.

Proceeds from the capital raise will pay off the $16.4 million debt owed to its major shareholder, the National Social Security Authority (NSSA).

RTG owed NSSA loans amounting to $10 million and $3.6 million plus interest, which fell due in December 2015.

The hotelier has been failing to pay off the loan until NSSA obtained a High Court judgment for the loan plus interest, risking its Bulawayo Rainbow Hotel, which had been declared as security for the loan.

RTG debts will fall to $22 million from $42 million after the restructuring.

Major RTG shareholders before the rights offer were NSSA and Nicholas Van Hoogstraten’s Hamilton and Hamilton Trustees, with 56 percent and 32 percent respectively. – The Source

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