Tanganda re-lists on ZSE
LIVINGSTONE MARUFU
Zimbabwe’s largest tea producer, Tanganda Tea Company Limited, is today expected to start trading its shares on the Zimbabwe Stock Exchange (ZSE) following its demerger from parent company, Meikles Limited, 14 years after exiting the bourse.
Established in 1924, Tanganda was once listed on the ZSE, but voluntarily delisted in 2007 following its merger with Meikles, Cotton Printers and Kingdom to form Kingdom Meikles Limited.
The marriage, however, collapsed after three years, with Tanganda and Cotton Printers becoming wholly owned subsidiaries of Meikles and Kingdom Bank going separate ways in 2010.
The re-listing comes as Meikles believes Tanganda is now in a solid position to unlock value for shareholders as a stand-alone entity.
The split will enable the two separate companies to exploit their synergies and the re-listing of Tanganda could help in capital raising initiatives for Meikles shareholders.
“…The listing ceremony for Tanganda Tea Company (is) on Thursday February 3, 2022 at the ZSE Offices,” ZSE said.
The demerger will see Meikles shareholders receiving one Tanganda share for every one Meikles share held as at the record date.
On implementation of the proposed transaction, Meikles shareholders will receive their pro-rata portion of 100% of the shares of Tanganda currently held directly by Meikles.
The transaction will enable Meikles shareholders to own a direct shareholding in Tanganda.
In its pre-listing statement dated October 26, 2021, Tanganda was reported as being valued at ZWL$5 183 482 196 or nearly US$61,41m in terms of its total assets as of March 31 last year.
Initially, Tanganda was supposed to re-list on the ZSE on December 9, 2021 but the move was delayed as Meikles sought the Zimbabwe Revenue Authority approval for capital gains tax relief.
The tax relief was for the demerger of Tanganda from Meikles first announced in March 2021. The tax relief was granted for 51.39% of the issued shares. The directors authorised the company to pay the residual capital gains tax liability.
Tanganda operates six estates, specialising in producing and packaging tea and coffee both for the domestic and foreign markets.
In addition the company also exports macadamia and avocado.
Post the unbundling of Tanganda, Meikles says it will focus on the retention and consolidation of its investments in the supermarkets, hospitality, properties and security services segments.
In the next three to five years, a substantial growth in investment in new stores and upgrades to the existing stores will be implemented.
“Supermarkets segment has achieved growth in both profits and operating cash flows during prolonged tough trading conditions and since March 2020, worsened by disruptions brought in by Covid-19 pandemic. This demonstrates resilience against shocks in the operating environment,” Meikles said in a circular to shareholders on the unbundling of Tanganda.
“The interest in supermarkets provides critical mass to deliver consistent returns to shareholders despite the impediments in the operating environment confronting businesses,”.
