Financial Gazette (Harare)
Dumisani Ndlela
27 June 2009
Harare — A CONSORTIUM of deep-pocketed investors led by astute banker Patterson Timba signalled its intention to control hospitality business, Rainbow Tourism Group (RTG), after increasing its shareholding in the group on Friday last week.
The development comes as it emerged that Timba had also secured control of the RTG board, and was now only moving towards shareholder control to mitigate excess reliance on partner shareholders in the group.
One industry source said Timba's move into RTG was strategic. RTG has several prized properties and an alliance could soon be established to have them managed by Timba's property group, the Zimbabwe Stock Exchange (ZSE)-listed Pearl Properties, a subsidiary of composite financial group, Africa First ReNaissance Corporation Limited (Afre), on which Timba is the executive chairman.
Interestingly, RTG and Pearl Properties last year struck a deal under which Pearl Properties will develop hotels in strategic areas across the country for RTG.
Timba's move to shore up his stake in RTG means that his consortium is poised to take on Nicholas Van Hoogstraten, a hawkish investor who dismally failed in his plot to oust RTG executives at an annual general meeting (AGM) held last month.
Hoogstraten has battled against the Chipo Mtasa-led executive since a ZW$80 billion rights issue about four years ago in which he alleges to have been duped from an underwriting arrangement that could have significantly shored up his interest in RTG. He has indicated that he is looking at controlling the hospitality firm.
But in a development that is likely to become a major disappointment to the maverick British businessman, the Timba-led consortium, which is using nominee vehicles for its acquisitions, was said to have swooped on 113,4 million shares on Friday through its stockbroking unit, valued at US$4,083 million, under a deal that saw its investment in RTG coming to just over 26 percent, from 20 percent it controlled prior to the AGM.
The shares were acquired from Kingdom Stockbrokers.
Although Van Hoogstraten remains the single biggest shareholder in RTG, with a 34 percent interest, he has no influence on the RTG board where he has not suggested nominees since recalling his representatives in a bout of anger after failing to secure underwriting rights in 2005. Van Hoogstraten had demanded the removal of seven executive directors at the May 28 AGM, saying "the major shareholder in the group has been unhappy for sometime with the way that the company has been run by a group of persons with little or no knowledge of business, in particular, the hospitality business".
Van Hoogstraten had alleged these persons were of no financial substance to the company.
Former board chairperson, Grace Muradzikwa, refused to offer herself for re-election at the AGM, saying she did not want to be part of the "Van Hoogstraten drama". Lawyer, Canaan Dube, was the only one of the seven directors to be voted out, indicating that Timba's consortium was also not keen to work with him.
Dube's law firm had particularly irked Van Hoogstraten as the legal advisor to the rights issue which he alleges directors conspired to deprive him of his entitlements.
Muradzikwa's refusal to be re-elected inevitably created room for a final push by Timba on the RTG board, where he secured control after his appointment as board chairman on June 1, three days after the AGM.
Timba was yesterday unavailable for comment. Well-placed sources said he was on a tour of RTG units around the country.
The shrewd deal-maker, who has in recent years surprised the market with several acquisitions on the ZSE, was said to be keen to shore up his consortium's interest to as much as 50 percent, sources indicated.
Timba was said to be in talks with a sizeable number of RTG shareholders for special bargains.
It was even suggested that he was prepared to talk to Van Hoogstraten for a purchase of his shares, although such manoeuvres were only expected to be made once Van Hoogstraten was clear he had lost the battle for control of RTG.
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