Tanganda turns to shareholders to raise cash
STAFF WRITER
Listed tea producer, Tanganda Tea Company Limited, says the plan to raise US$8m through a share offer to existing shareholders to address its strained working capital and delayed recapitalisation plans is still under consideration.
The development was confirmed by company’s secretary, Sharon Kodzanai, who said that the publicly traded company has called on its shareholders to help turn around the business.
“The directors of Tanganda Tea Company Limited wish to advise shareholders and the investing public that the proposed capital raise by a way of a renounceable rights offer, to the existing ordinary shareholders in proportion to their shareholding in the company to raise US$8m is still under consideration.”
She added, “The company is currently finalising the preparation of a circular to shareholders incorporating notice to convene an Extraordinary General Meeting of members for the purpose of considering and approving the capital raise.”
Kodzanai cautioned that the transaction may have a material effect on the company’s share price and advised shareholders to continue exercising caution until a full announcement is made.
This capital initiative addresses significant financial pressures.
The company faces a challenging agri-export environment marked by declining average tea prices. For the financial year 2024, Tanganda reported revenue of US$26m and a net profit of US$1.4m, yet its operating cash flow was negative US$2.4m
. Furthermore, the company’s total debt has risen substantially, from US$2.5m in 2023 to over US$6m in 2025, indicating a reliance on borrowing to fund operations and service existing debt.
Recent operational setbacks have compounded financial strains. Production volumes have been volatile; bulk tea production was 6% below the prior year in a recent quarter due to delayed rainfall.
Avocado production fell 47% due to a hailstorm and a biennial bearing cycle, and macadamia nut harvests dropped 43% due to extreme heat. While the company reported a 65% surge in quarterly revenue to US$5.6m, it posted a loss after tax of US$774,762, reflecting the impact of lower crop volumes and ongoing investments.
To accelerate funding, the board has approved complementary options alongside the rights offer.
This includes a strategic disposal of non-core assets valued at US$4.5m. Once a final agreement is signed, Tanganda expects to receive these funds within 40 days, subject to shareholder approval.
Additionally, a US$2.5m bridging facility is at an advanced review stage with a financial institution.
The board has undertaken a “robust process” to secure a suitable underwriter for the rights offer, engaging with regulators to obtain necessary clearances. The company is confident these measures will meet its immediate working capital needs.
Listed on the Zimbabwe Stock Exchange and established in 1924, Tanganda is a key player in tea, coffee, avocado, and macadamia production, with a reputation for quality and sustainability. The successful execution of its capital raise is critical for strengthening its balance sheet and funding its long-term growth strategy amidst a difficult market.
