Tanganda turns to asset disposals in push to unlock US$8m capital injection

SAMANTHA MADE

Publicly traded  agro- processing group, Tanganda Tea Company Limited, has shifted its focus toward disposing of non-core assets as it accelerates efforts to unlock the long-awaited US$8m capital raise, bringing much-needed relief to its strained working capital position and delayed recapitalisation plans.

The company had originally intended to secure the funding through a rights offer to stabilise working capital and support critical capital expenditure aimed at improving efficiencies and boosting revenue across its value chain.

But persistent delays, dating back to last year, have forced the company to consider alternative avenues.

“Deliberations on the most appropriate stock exchange for the capital raise were held. Initially, we considered migrating to the Victoria Falls Stock Exchange, but after extensive consultations and careful consideration, we decided to issue ordinary shares on the Zimbabwe Stock Exchange to raise US$8 million,” said the company’s secretary, Sharon Kodzanai.

She added that the Board had undertaken a “robust process” to secure a suitable underwriter, engaging regulators and evaluating the necessary clearances.

Kodzanai revealed that the company had also approved complementary options to fast-track the capital mobilisation process, including a strategic disposal of non-core assets.

“The board has also approved alternative capital raise options, including the strategic disposal of non-core assets. A due diligence by the off-taker is underway, and a term sheet has been finalised for the asset disposal,” she said.

According to the company, once a final agreement is signed, Tanganda expects to receive US$4.5 million within 40 days, subject to shareholder approval at an Extraordinary General Meeting.

In addition, a US$2.5m bridging facility is now at an advanced review stage with a financial institution.

“The board and management are confident these additional options will meet the company’s immediate working capital needs,” said Kodzanai.