Tanganda seeks US$8 million to counter economic he...

Tanganda seeks US$8 million to counter economic headwinds

Philemon Jambaya

Zim Now Editor

Tanganda Tea Company Limited is moving forward with a plan to raise US$8 million through a renounceable rights offer, issuing new shares to its existing shareholders. This capital raise comes as the company pivots from its earlier intention to pursue a secondary listing on the Victoria Falls Stock Exchange (VFEX). The tea producer is currently preparing a circular for shareholders, which will include a notice for an extraordinary general meeting to approve the capital-raising initiative.

The company's decision follows a challenging period. According to its half-year report for the period ending March 31, 2025, Tanganda's revenue dropped by 27% to US$8 million compared to the previous year. This decline was primarily due to the adverse effects of late rains on tea production and difficulties in the formal retail sector, which negatively impacted beverage sales. As a result, the company's profit after tax plunged by 73% to US$539,983.

Despite these challenges, Tanganda remains optimistic. Chairman Hebert Nkala stated in the report that demand for the company's products remains "relatively strong" despite intricate macroeconomic factors affecting local, regional, and international markets. He said the company is focused on improving process efficiencies, managing costs, and adding value to its products. Furthermore, Tanganda is actively pursuing a strategy of "sustainable market diversification" to expand its footprint in regional and international markets.

The company has advised shareholders and the public to exercise caution when dealing in its shares until a full announcement is made, as the transaction, if successful, could have a material effect on its share price. While facing short-term operational hurdles, Tanganda's balance sheet appears stable, with a strong liquidity ratio of US$1.63 for every dollar of short-term debt, indicating it is adequately capitalized to navigate the current environment.