Innscor could be on the verge of tightening its grip on Tanganda Tea Company through a proposed US$8 million rights issue, a transaction that, while framed as a recapitalisation effort, carries clear takeover implications.
Tanganda, one of Zimbabwe’s best-known tea and fruit exporters, says it is still battling to recover from the combined impact of the COVID-19 pandemic and the El Niño-induced drought.
These shocks left the company with a US$6,36 million deficit, forcing it back to shareholders to shore up its balance sheet and fund critical capital expenditure.
Proceeds from the rights issue will be channelled towards replacing ageing equipment, connecting the company’s three solar plants to the national grid, establishing a macadamia nut cracking facility, acquiring delivery trucks for its beverage unit, and supporting working capital requirements.
However, the strategic significance of the transaction lies less in the capital raise itself and more in who is underwriting it.
Rutanhi Beverages, Innscor Group’s beverage investment arm, has agreed to underwrite the rights offer. Under listing rules, any shares not taken up by existing shareholders will be acquired by the underwriter, potentially lifting Rutanhi’s stake to levels that trigger mandatory takeover provisions.
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Should Rutanhi’s shareholding exceed 35 percent, it would be required to make an offer to buy out remaining shareholders. Even if that threshold is not reached, Rutanhi has already signalled its intention to pursue a voluntary offer to minorities, a move that would effectively clear the path for Innscor to assume majority control of Tanganda.
Tanganda acknowledged the strategic intent behind the transaction, saying:
“This intention reflects Rutanhi’s long-term strategic commitment to the business while ensuring compliance with applicable legal and regulatory frameworks.”
Regulatory processes are already in motion. The Competition and Tariff Commission (CTC) has issued a comfort letter, allowing the rights issue to proceed. A full merger notification will be required should the outcome of the offer breach prescribed thresholds.
“If the outcome of the rights offer results in the applicable merger notification thresholds being met, the proposed transaction will be notified to the CTC, which will then issue its final determination, including any conditions that may be imposed,” Tanganda said.
Rutanhi sits at the centre of Innscor’s beverage portfolio, managing operations that include Prodairy, Probottlers, Buffalo Brewing, Mafuro Farming and Prodistribution. Through these businesses, Innscor controls some of the country’s most recognisable beverage brands, such as Life, Revive, Bally House, Fizzi and Nyathi beer.
A successful takeover would add Tanganda’s beverage brands — including Tanganda, Stella and Nella Rooibos — alongside its tea estates, macadamia and avocado operations, further entrenching Innscor’s dominance across Zimbabwe’s consumer goods value chain.
Tanganda is currently majority-owned by the Meikles family, which holds 49 percent, while Mega Market owns 10 percent.
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