Nqobile Bhebhe-Zimpapers Business Hub
TANGANDA Tea Company Limited shareholders will meet next month to decide on the directors’ proposal to delist from the Zimbabwe Stock Exchange and move the listing to the Victoria Falls Stock Exchange.
The move will align the Victoria Falls Stock Exchange (VFEX’s) US dollar trading currency with foreign currency-based earnings and improve its appeal to investors.
The long-proposed migration, which would reduce trading costs, improve valuation transparency and broaden the company’s investor base, comes as Tanganda pursues investments in agricultural processing and infrastructure.
The company’s board of directors resolved on September 28 to voluntarily terminate the ZSE listing and relist the shares on the VFEX by way of introduction.
The transaction remains subject to shareholder approval and regulatory clearance, with the circular available for inspection until November 11.
Tanganda said the move would reduce currency-related valuation distortions, lower trading costs and broaden its investor base, supporting planned investments in agricultural processing and infrastructure.
Tanganda adopted the US dollar as its functional and reporting currency effective October 1, 2023, with most of its revenue derived 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.
“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,” Tanganda said in a circular to shareholders
The company also believes the VFEX could attract foreign, diaspora and US dollar-based institutional investors, potentially supporting its turnaround and growth strategy.
“A VFEX listing enhances Tanganda’s profile amongst the local and international investing public and the exchange is purpose-built to attract foreign, diaspora and US dollar-based institutional capital.
“Migration will enhance the company’s international profile and broaden its investor base, supporting its turnaround and growth initiatives, including avocado oil extraction, macadamia cracking, beverage plant modernisation and solar projects requiring hard-currency funding aligned with its US dollar cost base.”
Tanganda also cited shareholder tax incentives and offshore settlement arrangements as potential advantages of the VFEX.
“The VFEX allows foreign shareholders to repatriate dividends and disposal proceeds freely through offshore settlement.
“The exchange offers tax incentives for shareholders, including a 5 percent withholding tax on dividends for foreign shareholders and an exemption from capital gains tax on the disposal of shares, enhancing shareholder returns relative to the ZSE.”
Tanganda added that dollar-denominated trading and reporting would help investors assess its performance more accurately.
“A US dollar valuation of the company enables shareholders to realise the true value of their investment and provides a more accurate benchmark of the stock’s performance while mitigating valuation volatility.
“Entities listed on the VFEX report in US dollars and are subject to robust governance and disclosure requirements, supporting the efficient evaluation of the company’s performance.”
According to stockbroking firm IH Securities, lower costs could make dealing in Tanganda shares more attractive, potentially encouraging greater investor participation.
IH Securities said the migration would address the currency mismatch between Tanganda’s dollar-earning operations and its ZiG-priced equity, potentially providing investors with a more accurate basis for valuing the business.
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.”
The migration is expected to make the company’s market valuation more closely reflect its dollar-denominated earnings and financial reporting.
IH Securities also said that lower dealing costs on the VFEX are a potential catalyst for improved share liquidity.
Tanganda estimates that the VFEX’s all-in round-trip trading costs are approximately 2,32 percent, compared with 4,15 percent on the ZSE.
IH Securities said the VFEX provides Tanganda with a bigger stage to attract capital from foreign investors, the diaspora and US dollar-based institutions.
The planned investments are intended to expand value addition, modernise production facilities and improve operational efficiency.
However, a listing by introduction does not itself guarantee fresh capital or improved share liquidity.
IH Securities said the tax incentives could improve after-tax returns for foreign shareholders, while offshore settlement arrangements would facilitate the repatriation of dividends and disposal proceeds.
The proposed transaction remains conditional on shareholder approval at the Extraordinary General Meeting scheduled for November 11 and the necessary regulatory clearances.
These include approval from the Securities and Exchange Commission of Zimbabwe for termination of the ZSE listing, a ZSE letter of good standing and VFEX approval of Tanganda’s application for listing by introduction under Rule 92 of Statutory Instrument 62 of 2026.
The ZSE approved the distribution of the circular on October 20.
According to the circular, Tanganda’s lead financial advisor, sponsoring broker, legal advisors and transfer secretaries have submitted written consents to act in their respective capacities.
