Harare, February 26, 2018 (New Ziana) -Hospitality concern Rainbow Tourism Group (RTG)’s rights and debenture offer to raise $22.5 million received a 56.52 subscription allowing the firm to mobilize capital to settle its debt and focus on long term operations.
As part of the offer, RTG aimed to mobilize 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 linked to 2.871 redeemable debentures with a subscription price of 0.93 cents each at a coupon rate of 6 percent per annum.
The average subscription to the offer saw shareholders taking up 353.3 million shares while 1 million debentures were taken up, mobilizing in total $12.72 million.
The National Social Security Authority which was the underwriter of the offer took up the remainder of the shares and debentures that shareholders were not interested in.
This means NSSA increased its shareholding in the group which stood at
56 percent before the offer.
Before shareholders approved the offer on January 17 this year, the hotel group said the funds would be used to retire its debt of over $16 million owed to NSSA, which has been weighing down its 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 last year.
In its rationale for the combined rights offer and debentures, RTG said restructuring of its outstanding debts through the capital raise would result in management being able to focus on long-term strategic needs of the business instead of concentrating on its short-term survival.