RAINBOW Tourism Group (RTG) says it has secured a US$7.5 million loan from the African Export Import Bank (Affreximbank) to finance its regional expansion drive as well as refurbish existing hotels.
The Zimbabwe Stock Exchange (ZSE) listed hotel and leisure group announced its 2009 financial results on Monday which showed turnover increasing to US$17.5 million while profit before tax was modest at US$179 000.
Group chief executive Chipo Mutasa said the company was eying hotels in Angola, Mozambique and Zambia as it seeks a foothold in the whole southern African region.
"Yes, the money is coming, we haven't received it yet but we have signed the loan agreement," Mutasa said, referring to the Affreximbank facility.
The loan is for a seven-year period, and has a one-year grace period.
Already, the Rainbow group operates in Mozambique and Zambia, markets the company entered last year and now wants to develop further.
Zimbabwe’s hotel operators, hit by the recent economic crisis at home, are increasingly investing in neighbouring countries to reduce business risk.
Meanwhile, Mutasa said part of the Affreximbank loan would also be used to refurbish Rainbow's existing properties in Zimbabwe, ahead of the World Cup in neighbouring South Africa in June.
RTG’s Zimbabwe hotels include its flagship Rainbow Towers in Harare, Ambassador Hotel, also in the capital, Bulawayo Rainbow Hotel, Kadoma Hotel and Conference Centre, the Vitoria Falls Rainbow Hotel and a range of eco-tourism lodges.
The company, which is Zimbabwe's second largest hotel chaim, was formed in the early 1990s when the government commercialised its tourism promotion firm, the Zimbabwe Tourism Investment Group (ZTIG).
After rebranding to RTG in 1994 the company enjoyed steady growth which culminated in a listing on the ZSE in 1999 with the government selling-off its 70 percent shareholding to institutional investors, staff and members of the public.