SHAREHOLDERS of Tanganda Tea Company Limited have approved a US$8 million renounceable rights offer, clearing the way for a near one-for-one share issue aimed at easing liquidity pressures and stabilising the group’s debt-laden balance sheet.
The capital raise follows the company’s disclosure last month of a US$6,36 million cash deficit and US$7,1 million in bank borrowings — a funding gap it warned could weigh heavily on production and debt servicing without urgent intervention.
The approval is a key step for the tea producer to strengthen its finances amid rising operational challenges, with the capital injection expected to ease short-term cash constraints, support production, and give breathing room for debt servicing as the group navigates climate and energy-related disruptions.
Tanganda’s liquidity strain has been compounded by climate-induced production setbacks, persistent power supply disruptions and elongated agricultural working-capital cycles that have slowed export receipts.
At an extraordinary general meeting (EGM) held last week, shareholders passed an ordinary resolution authorising the issuance of 263 821 324 new ordinary shares from the company’s authorised but unissued share capital.
The resolution, passed in terms of Article 115 of the company’s Articles of Association and relevant provisions of the Companies and Other Business Entities Act (Chapter 24:31) and the Zimbabwe Stock Exchange Listing Requirements (SI 134/19), grants approval for the US$8 million capital raise through a renounceable rights offer.
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Under the offer, 263 821 324 new ordinary shares of US$0,0012 nominal value each will be issued to existing shareholders at a subscription price of US$0,0303 per share.
The offer is structured based on one new ordinary share for every 0,9896 ordinary shares held as of the close of business today — effectively a near one-for-one issue.
Shares not taken up by existing shareholders may be allotted to renouncees or the underwriter in terms of the underwriting agreement.
Shareholders also approved an increase in the company’s authorised share capital from 400 million to 700 million shares, creating sufficient headroom for the rights offer and potential future equity issuances.
Importantly, the rights offer will be settled strictly in United States dollars, ensuring the full US$8 million capital raise is received in hard currency.
Rutanhi Beverages Limited was approved as the underwriter of the rights offer and will take up any shares not subscribed for by existing investors.
“Accordingly, shareholders are advised that the board of directors has been authorised to proceed with the implementation of the renounceable rights offer,” Tanganda said.
The rights offer will open at 9am tomorrow and close on March 17.