By Ndafadza Madanha
RTG shareholders have approved a US$22.5m rights offer to restructure the entity’s balance sheet significantly reducing its gearing ratio.
In an interview after the company AGM&EGM, CEO Tendai Madziwanyika said his organization was now geared to embrace growth opportunities in the hospitality sector.
He said the company will also be able to offset its US$16m debt to NSSA and other short term loans with local financial institutions that were curtailing it growth prospects.
“The approval of the rights offer will enable us to restructure our balance sheet and close the working capital. In respect of the NSSA loan we shall pay it off and save our property which the creditor had obtained a judgment against. The other US$1.7m will go to service our short term loans with financial institutions another US$3m will go to trade receivables. Our gearing ratio will also go down from 69 percent to less than 35,” said Madziwanyika.
The total debt of RTG will also go down by another US$12m from US$34m before the rights approval, while the issue will raise US$5.8m in working capital.
He said the company in the past five years has spent approximately US$16Mm in interest and capital expenditure outflows. Another US$11m was paid to Afrexim bank to extinguish its loan.
Going forward Madziwanyika said the company was looking at exploring opportunities that emerged with the increased 90 000 seats into Victoria Falls.
“We have plans to increase room space in Vic Falls through existing opportunities and to do Greenfield investments. Victoria Falls is another potential hub in Southern Africa and a shorter route for the European airlines”.