TEA producer, Tanganda Tea Company Limited, will dispose of non-core assets and secure bridging finance as it seeks to raise US$7 million for working capital needs.
The capital raising drive will run alongside job cuts expected to save the company US$1,8 million annually, as part of efforts to streamline operations.
In July, Tanganda announced that it would no longer be pursuing a secondary listing on the Victoria Falls Stock Exchange, despite initially wanting to do so to raise more capital.
Instead, the firm announced plans for a capital raise by way of a renounceable rights offer of its listed Class A ordinary shares to raise US$8 million.
Advertisements
The measures come after under-performance in key crops — tea, macadamia and avocado — driven by adverse weather, uneven rainfall and natural production cycles, compounded by historic commodity price declines and lingering effects of COVID-19 on the sector.
The challenges weighed heavily on the group, with audited results for the year ended September 30, 2025, expected to show a loss after tax of US$4,2 million.
“To accelerate realisation of the capital raise proceeds in general, the board has also approved additional alternative capital raise options,” Tanganda said in its latest market update.
It said a due diligence by the off-taker is underway, and a term sheet has been finalised for the disposal of non-core assets.
“Once an agreement is signed, US$4,5 million proceeds are expected to be realised within 30 days, subject to shareholder approval at an extra-ordinary general meeting,” Tanganda said.
It said a bridging facility of US$2,5 million was at an advanced stage of review by the relevant financial institution.
Tanganda said the board and management were confident the measures would meet the company’s immediate working capital requirements.
“As part of its business recovery plan, the company is mobilising an injection of up to US$8 million to address the working capital deficit and to embark on critical capital expenditure that will boost revenue and address efficiencies in the value chain,” Tanganda said.
“Several factors have delayed the consummation of the capital raise transaction since the issuance of the first cautionary statement on 28 October 2024.”
These delays include the deliberations on the most appropriate stock exchange on which to undertake the capital raise, and the board is undergoing a robust process to identify the most suitable underwriter.
“In view of the agricultural commodity price decline, the board and management have undertaken to streamline operations in pursuit of business sustainability. These strategies include implementing a board-approved staff rationalisation exercise to achieve efficient use of human resources throughout the company,” Tanganda said.
“The ongoing exercise resulted in an annual saving of US$1,8 million for the year ended 30 September 2025. The cattle business unit has been trimmed and consolidated. All livestock has been relocated to New Year’s Gift and Zona, which are mono-cropping estates, releasing 50 employees from the livestock section to the company’s core business.”
These measures are supposed to bring the company back to long-term profitability, Tanganda said.
“The company is optimistic about the prospects of recovery. The shareholders, board of directors, and management are working in harmony to return the business to sustainable profitability and to a dividend-paying position,” it said. -newsda
