Tanganda Seeks Shareholder Approval to Raise $8M via Rights Issue

TANGANDA Tea Company is seeking shareholder approval to raise US$8 million which will be injected to support the company’s projects.

The fresh funding will be mobilised by way of a Rights Offer which allows existing shareholders to purchase additional shares directly from the company, typically at a discounted price, in proportion to their current holdings.

“The Board is seeking Shareholder approval to raise new capital amounting to US$8,000,000 (eight million United States dollars) through a Renounceable Rights Offer of 263,821,324 (two hundred and sixty-three million eight hundred and twenty-one thousand three hundred and twenty-four) new ordinary shares in the share capital of Tanganda,” the company said in a circular to shareholders.

Under the arrangement, a shareholder of Tanganda will be entitled to subscribe for one new ordinary share for every 0.9896 shares currently held.

It is specifically recorded that the currency of this Rights Offer is US$ in forma specifica only, and each shareholder elects to pay any sum due in United States dollars, with all payments under the Rights Offer transactions to be settled strictly in US$.

Tanganda said the Covid-19 pandemic disrupted most businesses globally and as a result, the company emerged from the pandemic era with a cash flow deficit. This has since been exacerbated by significant headwinds including global climatic phenomena such as El Nino, declining international crop prices, as well as power shortages and high energy costs.

These challenges have resulted in the company’s cash deficit widening to approximately US$6.36 million.

The fresh equity injection is expected to enhance the company’s ability to finance its working capital requirements and fund critical capital expenditure.

“Specifically, the Company requires patient capital to enable it to procure packaging materials and inputs for packed tea and water, service debts owed to its key suppliers of fertilisers, chemicals and fuel, pay salaries and wages on time, replace the Tingamira water bottling plant, grid-tie the three solar plants and set up a modular macadamia cracking unit,” Tanganda said.

Source: NewZimbabwe.com