ZIMBABWE: RAINBOW Tourism Group $10 million Loan Proposal By National Social Security Authority (NSSA)

Van Hoogstraten’s beef with RTG seemed to have ended in 2012 when his nominees were elected to join the board of the hospitality group.

At a meeting of shareholders yesterday, van Hoogstraten argued that RTG erred by failing to inform shareholders of its intention to restructure the loan. He also argued that the board comprising of NSSA and First Mutual Holdings (FMH) was conflicted.

“This approval is illegal at this stage, it has to be presented to shareholder and it has to exclude NSSA and FMH who are conflicted,” he said.

NSSA is the largest shareholder in RTG and FMH.

Van Hoogstraten’s remarks came after RTG board chairperson John Chikura told shareholders that the group restructured the $13 640 349 loan facilities with NSSA and the new facility has 7-year tenure at an interest rate of 6% per annum.

Initially the loan had a tenure of two years attracting an interest rate of 10% annually.

“This loan was due at the end of the year December 2015, given the situation, but NSSA could have recalled their loan or sue the company. So the term sheet has kept NSSA at bay. So we are saying to shareholders your company is still standing strong and will do everything that is required of us for the company to succeed,” Chikura said.

Legal advisor Vulindlela Sibanda said the term sheet required approval by shareholders and the Zimbabwe Stock Exchange.

“So as it stand today…is not illegal because it has not yet been finalised and is subject to those two regulatory issues”.

Van Hoogstraten also contested approval of auditor’s fees and re-appointment of Grant Thornton as auditors for the coming year.

Meanwhile, RTG recorded a 13% increase in revenue to $8,6 million for the first four months of the year of 2016 compared to $7,6 million on the same period last year driven by the Zimbabwe hotels, which continued to register strong performance despite continued liquidity challenges being experienced in the economy.