Listing Migration:  Plans to migrate its listing to the Victoria Falls Stock Exchange (VFEX)

Capital Raise: Aims to raise US$7.7 million through a renounceable rights offer

Significant Implications: Successful transactions may boost share price, diversify revenue streams, and attract foreign investment

Harare- Tanganda Tea Company Limited is aiming to list on the US dollar-denominated Victoria Falls Stock Exchange (VFEX) while raising US$7.7 million through a renounceable rights offer. This move is outlined in the company’s latest circular to shareholders and signifies a significant strategic shift for the Zimbabwean tea producer.

The company’s directors are pursuing a dual-pronged approach that involves migrating its listing from the Zimbabwe Stock Exchange (ZSE) to VFEX and initiating a capital raise of $7.7 million.

“Shareholders of Tanganda Tea Company Limited and the investing public are advised that the Directors of the Company are engaged in discussions that will culminate in calling for an Extraordinary General Meeting of Members.

This meeting will consider and approve the migration of Tanganda’s listing to VFEX and the associated capital raise,” the company stated.

Tanganda is set to become the 14th company listed on VFEX, following a demerger from its parent company, Meikles, which was approved in 2021.

Tanganda had previously been listed on the ZSE until it voluntarily delisted in 2007 after merging with Meikles, Cotton Printers, and Kingdom to form Kingdom Meikles Limited.

While VFEX no longer offers a 100% increment benefit, the ability to trade shares in US dollars helps preserve shareholder value and enhances foreign investment appeal.

However, liquidity remains a challenge due to the limited number of listed companies, resulting in lower trading volumes compared to the ZSE.

The implications of these transactions for shareholders are significant. If successful, the listing and capital raise could boost the share price, diversify revenue streams, and enhance governance.

However, shareholders should remain cautious about potential risks, including integration challenges, dilution from the capital raise, and market volatility.

Thus, Tanganda's planned VFEX listing and capital raise represent a strategic shift aimed at fueling growth, improving liquidity, and attracting foreign investment.

While there are inherent risks, the potential benefits of this dual-pronged approach may outweigh the drawbacks.

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