Tanganda seeks shareholder approval for VFEX switch

TAFADZWA CHINYANGANYA

Tanganda Tea Company shareholders will next month vote on a proposed exit from the Zimbabwe Stock Exchange (ZSE) and a switch to the US dollar-denominated Victoria Falls Stock Exchange (VFEX), in a move designed to align the company’s capital markets platform with its export-driven business and finance its next phase of growth.

Business Times can report that the country’s largest tea grower, packer and distributor has scheduled an extraordinary general meeting (EGM) for November 13, 2026, to seek approval for the proposed migration, which would see its ZSE listing terminated on November 18 before trading begins on the VFEX on November 23.

The proposed transfer comes as Tanganda seeks to strengthen access to US dollar-denominated capital to fund investments in avocado oil extraction, macadamia nut processing, beverage manufacturing and solar energy.

The company’s board resolved in September to pursue a voluntary delisting from the ZSE and a listing on the VFEX by way of introduction, a process that would transfer its existing shares without issuing new equity.

Tanganda chairman Addington Chinake said the migration would address a growing mismatch between the currency of the company’s listing and the underlying economics of its business, whose functional currency has been the US dollar since October 1, 2023.

“The economic substance of our business is substantially US dollar denominated. The company’s bulk tea, macadamia, avocado and coffee are sold predominantly into export markets in hard currency, and the company adopted the US dollar as its functional and reporting currency with effect from 1 October 2023,” Chinake said.

He said the company’s financial reporting was already aligned with VFEX requirements, making the migration a logical step following the successful completion of its US$8 million rights offer in the first half of 2026.

“Against this backdrop, the board has carefully considered whether the company’s current ZiG-denominated listing on the ZSE continues to reflect the underlying currency profile of the business,” Chinake said.

He added that the VFEX would better align Tanganda’s capital-raising platform with the currency in which it earns most of its revenue, reports its financial performance and expects to finance its turnaround and growth strategy.

The switch could also reduce transaction costs for investors. According to the company’s circular, transaction costs on the VFEX amount to 2,32 percent, compared with 4,15 percent on the ZSE — a reduction of 1,83 percentage points.

Tanganda expects the migration to make its shares more attractive to investors seeking US dollar-denominated assets, particularly foreign investors, the diaspora and institutional investors.

The company also cited tax incentives associated with the VFEX, including a five percent withholding tax on dividends paid to foreign shareholders, an exemption from capital gains tax on the disposal of shares and the ability to repatriate investment proceeds through offshore settlement arrangements.

However, the proposed migration remains subject to shareholder approval and regulatory clearances. If the resolution is rejected, Tanganda will remain listed on the ZSE.

Other conditions include approval from the Securities and Exchange Commission of Zimbabwe for termination of the ZSE listing, a letter of good standing from the ZSE and approval from the VFEX under Rule 92 of Statutory Instrument 62 of 2026.

If shareholders approve the proposal, November 18 will be the last day of trading on the ZSE. The transfer of the share register and completion of the VFEX listing are scheduled for November 20, with trading expected to commence on November 23.

Tanganda estimates the migration will cost US$60 600, excluding value-added tax. The budget includes US$25 000 for financial advisory services, US$10 000 in legal fees, US$6 250 for the sponsoring broker and US$9 350 in ZSE and VFEX fees, among other expenses.

Established in 1924 and incorporated in 1930, Tanganda first listed on the stock exchange in 1963 as Rhodesia Tea Estates.