Online Reporter
Nqobile Bhebhe, Zimpapers Business Hub
THE board of Tanganda Tea Company Limited has approved two new capital-raising options, a strategic sale of non-core assets valued at US$4.5 million and a US$2.5 million bridging facility as part of measures to accelerate efforts to stabilise operations and address immediate working capital needs.
These initiatives are part of a larger recovery programme aimed at raising up to US$8 million to overcome the company’s working capital deficit and fund essential capital expenditures.
In an update, company secretary Sharon Kodzanai said as part of its business recovery plan, the company is mobilising an injection of up to US$8 million to address the working capital deficit and to embark on critical capital expenditure that will boost revenue and address efficiencies in the value chain.
A few months ago, Tanganda informed shareholders that it would no longer pursue a secondary listing on the Victoria Falls Stock Exchange, despite initially planning to do so to raise additional capital.
It hinted that several plans for a capital raise by way of a renounceable rights offer of its listed Class A ordinary shares to raise US$8 million.
However, the business noted that the capital-raising process had faced delays.
“Several factors have delayed the consummation of the capital raise transaction since issuance of the first cautionary statement on 28 October 2024. Some of these include: Deliberations on the most appropriate stock exchange on which to undertake the capital raise.
“Consideration was initially given to a migration to the Victoria Falls Stock Exchange however, following extensive consultation and after further careful consideration, a decision was made to issue ordinary shares on the Zimbabwe Stock Exchange and raise US$8 million.”
Kodzanai said the Board also confirmed it had completed a rigorous selection process for an underwriter.
“The Board has undergone a robust process to identify the most suitable underwriter taking several factors into consideration, including clearances from regulatory authorities.”
To complement the main ZSE capital raise and expedite availability of funds, the Board approved two additional alternative funding options.
“Strategic disposal of non-core assets. A due diligence by the off taker is under way and a term sheet has been finalised for the disposal of the asset. Once an agreement is signed, US$4.5 million proceeds are expected to be realised within 30 days subject to shareholder approval at an Extra Ordinary General Meeting.”
“Bridging facility of US$2.5 million. This is in advanced stages of review by the relevant financial institution.”
The company said these interventions would help cushion the business while the main capital raise is being finalised.
The Board and management indicated strong confidence that these additional set of options will meet the immediate working capital requirements for the Company.
In response to the operating environment, Tanganda has also intensified internal restructuring to enhance sustainability.
“These strategies include: Implementing a board approved staff nationalisation exercise to achieve efficient use of human resources throughout the Company. The on-going exercise resulted in an annual saving of US$1.8 million for the year ended 30 September 2025.
“The cattle business unit has been trimmed and consolidated. All livestock has been relocated to New Year’s Gift and Zona which are mono-cropping estates releasing 50 employees from the livestock section to the Company’s core business.”
