By Chantelle Muzanenhamo
Tanganda Tea Company, the horticulture powerhouse listed on the Zimbabwe Stock Exchange (ZSE), has announced a significant shift concerning its plans to migrate to the Victoria Falls Stock Exchange (VFEX).
In a cautionary statement released on Tuesday, company secretary Ms. Sharon Kodzanai revealed that the board of directors has reconsidered its previous recommendations, initially made in cautionary announcements issued in October and November, regarding the transition.
Originally, Tanganda aimed to move its listing to the US dollar-denominated VFEX and planned to initiate a renounceable rights offer to raise US$7.7 million. However, the latest update signifies a change in strategy.
Instead of migrating its listing outright, the Tanganda board now proposes the creation of a new class of shares, termed Class A ordinary shares, which will be listed on the VFEX as a secondary listing.
This shift is seen as a move to strengthen the company’s capital structure and offer enhanced returns to shareholders.
“Shareholders of Tanganda Tea Company Limited and the investing public are advised to take note that directors no longer recommend the migration of Tanganda’s listing to VFEX,” Ms. Kodzanai stated.
“Instead, they propose the creation of a new class of shares to be known as Class A ordinary shares, which will be subsequently listed on the VFEX as a secondary listing,” she added.
Following the introduction of these new Class A ordinary shares, Tanganda plans to conduct a renounceable rights offer aimed at raising US$8 million.
Existing shareholders will be entitled to purchase these new shares proportionately to their current holdings.
The renounceable rights offer allows shareholders to buy additional shares at a discounted price, and importantly, the option to sell their rights to other investors, thus creating liquidity and potential for profit.
Ms. Kodzanai cautioned that the execution of these transactions, pending their success, is expected to have a significant impact on the company’s share price.
“Accordingly, shareholders are advised to exercise caution when dealing in the company’s shares,” she noted.
Further details regarding these new developments will be provided in a shareholder circular that is currently being finalized.
Tanganda, recognized as the largest producer, packer, and distributor of tea in Zimbabwe, made its return to the ZSE in 2021 after being absent for over a decade.
The company has diversified its operations significantly in recent years, expanding its portfolio to include macadamia and avocado farming, coffee production, and spring water bottling.
This diversification has positioned Tanganda as a formidable player in agricultural exports and an appealing investment option in the region.
As the company moves forward with its revised plans, investors and market observers will be keenly watching its next steps and the potential implications for both the company and its shareholders for one of the blue chip entities on the stock exchange.