Nqobile Bhebhe Zimpapers Business Hub
TANGANDA Tea Company Limited shareholders will meet next month to decide on a board proposal to delist from the Zimbabwe Stock Exchange (ZSE) and relist on the Victoria Falls Stock Exchange (VFEX).
The proposed migration — by way of introduction — aims to align the company’s equity listing with its primary earning currency, reduce trading costs, and improve valuation transparency while broadening its investor base.
Tanganda’s board resolved on September 28 to voluntarily terminate its ZSE listing. The transaction remains subject to regulatory clearance and shareholder approval at an Extraordinary General Meeting (EGM) scheduled for November 11, with the circular available for inspection until that date.
Tanganda adopted the US dollar as its functional and reporting currency on October 1, 2023, deriving the majority of its revenue from exports of bulk tea, macadamia nuts, avocados, and coffee.
“A VFEX listing aligns the company’s listing currency with its operating reality, removing the mismatch between a US dollar business and a ZiG-quoted equity and reducing valuation distortion and currency translation risk for investors,” Tanganda stated in its circular.
“The VFEX’s lower all-in round-trip trading costs of approximately 2,32 percent compared with approximately 4,15 percent on the ZSE would enable shareholders to retain more value, and the reduced cost of dealing may improve the liquidity of the company’s shares.”
The company noted that USD-denominated capital will support planned growth initiatives, including avocado oil extraction, macadamia cracking, beverage plant modernisation, and solar projects requiring hard-currency funding.
Highlighting tax and offshore advantages, Tanganda added:
“The VFEX allows foreign shareholders to repatriate dividends and disposal proceeds freely through offshore settlement.
“The exchange offers tax incentives, including a 5 percent withholding tax on dividends for foreign shareholders and an exemption from capital gains tax on share disposals.”
Equities brokerage IH Securities noted that the lower transaction costs could catalyse improved liquidity and participation. Addressing the currency shift, IH Securities confirmed the transaction would result in a
“USD-quoted share for a USD-earning business, removing the mismatch between a dollarised exporter and a ZiG-priced equity.”
However, the stockbroking firm cautioned that a listing by introduction does not automatically guarantee fresh capital or immediate share liquidity.
Required regulatory steps include approval from the Securities and Exchange Commission of Zimbabwe (SECZ) for the ZSE delisting, a ZSE letter of good standing, and VFEX approval under Rule 92 of Statutory
Instrument 62. The ZSE approved the distribution of the circular on October 20, and all lead advisors have submitted written consent to act in their respective capacities.
