MUTARE – Tanganda Tea Company Limited, a horticulture giant listed on the Zimbabwe Stock Exchange (ZSE), is finalising plans to raise US$8 million through a renounceable rights offer, as part of a broader strategy to enhance its capital structure and diversify shareholder offerings.
Through a renounceable rights offer, existing shareholders are afforded the opportunity to acquire additional shares in the company at a preferential rate, while also retaining the flexibility to transfer their rights to other investors if they so choose.
The company announced that it is preparing a circular to shareholders containing details of the rights offer and a proposed secondary listing on the Victoria Falls Stock Exchange (VFEX).
The rights offer, which is subject to regulatory approval, will be issued to existing ordinary shareholders in proportion to their shareholding. The company plans to use the proceeds from the rights offer to support its growth initiatives.
In addition to the rights offer, Tanganda Tea Company Limited also plans to create a new class of shares, known as Class A ordinary shares, which will be listed on the VFEX as a secondary listing.
This move is intended to provide investors with greater flexibility and access to the company’s shares.
The company has advised its shareholders to exercise caution when dealing in its shares, as the transactions may have a material effect on the company’s share price.
A circular to shareholders and a notice to convene an Extraordinary General Meeting (EGM) to consider and approve the transactions will be issued in due course.
Following a reevaluation by its board of directors, Tanganda Tea Company, late last year, revised its earlier plans. Initially, the company had announced its intention to migrate to the US dollar-denominated VFEX and undertake a renounceable rights offer to raise US$7.7 million.
However, in a fresh cautionary statement released last December, the company disclosed that the board had now proposed an alternative strategy aimed at enhancing the company’s capital structure and expanding its shareholder offerings.
