• Tanganda has cancelled its plan to create a new class of shares and list on the VFEX
• The move reverses a 2024 strategy that involved Class A shares, a dual listing, and hard currency fundraising
• The broader context shows that neither VFEX nor ZSE listings guarantee capital raising success, due to persistent macroeconomic instability, exchange rate volatility

Harare -Tanganda Tea Company Limited has scrapped its long-standing plan to create a new class of shares and list them on the Victoria Falls Stock Exchange (VFEX), opting instead to raise US$8 million through a renounceable rights offer on the Zimbabwe Stock Exchange (ZSE).

The decision, disclosed in  a  cautionary statement on 23 July 2025, reverses what had been presented in October 2024 as a strategy involving the creation of Class A ordinary shares, a dual listing, and hard currency capital mobilisation.

‘’ There will no longer be a creation and secondary listing of the proposed Class A ordinary shares on the VFEX,’’ the group said.

The about-turn suggests not only a reassessment of the structural complexity of the original proposal but also a broader reflection on the evolving limitations of Zimbabwe’s foreign currency bourse.

While the VFEX was launched in 2020 with the intention of attracting offshore capital and insulating listed companies from domestic currency volatility, largely due to shallow liquidity, limited secondary market activity and tepid investor appetite, the bourse hasn’t fully performed to expectations.

Tanganda’s withdrawal appears to be yet another reflection of these challenges, underscoring growing skepticism around the platform’s ability to consistently facilitate meaningful capital formation.

Though the company has not explicitly stated the reasons for backtracking, it might be due to undercapitalization of the bourse which the group felt will be hard to raise capital, after incurring high listing costs.

Bindura Nickel Corporation (BNC), one of the early adopters of the VFEX platform, failed to raise capital despite struggling. Currently, the company is under corporate rescue.

Largest foods producer National Foods also delisted, the first company to do so,  likely signaling that more can be obtained without listing than being listed.

Initially VFEX offered incentives to attract more listings including capital gains tax exemption, reduced withholding tax on dividends and unrestricted repatriation of capital and dividends.

However, by FY2024, these incentives where no more, with only trading in hard currency remaining the major one.

This has caused slow adoption of the listings.

However, listing on both bourses to raise capital seems tricky as OK Zimbabwe has filed to raise 30 million leading to the sell of its 7 properties.

On the other hand, Caledonia Mining Corporation, which operates the Blanket Gold Mine, successfully raised capital post VFEX listing.

However, Caledonia is fundamentally different, as a dual listed entity with pre existing access to global markets and shareholder liquidity in foreign jurisdictions, its success may say more about its external capital connections than about the VFEX’s efficacy itself.

In this context, Tanganda's a dual listing would have further compounded regulatory and operational burdens, including the cost of compliance and the challenge of sustaining active trading on both bourses. In an environment where investor confidence is already fragile, such a structure may have introduced more friction than flexibility.

The decision also reflects  the choice between VFEX and ZSE does not necessarily guarantee successful capital raising brought out on OK Zimbabwe the country’s largest grocery retail chain securing shareholder approval to dispose of property assets after failing to raise the US$30 million it sought through traditional capital markets.

This illustrates that market receptiveness is constrained not just by listing venue, but by broader macroeconomic headwinds, exchange rate uncertainty, and limited institutional investment appetite.

Even raising capital on the ZSE, while  more liquid, carries its own set of risks, particularly for companies without strong balance sheets or export driven earnings.

However, in Tanganda’s case, there may still be cautious optimism, unlike OK Zimbabwe, which is heavily exposed to local currency denominated consumption and imports, Tanganda operates in the relatively less crowded agricultural export sector.

Its revenue is largely earned in hard currency, derived from global tea and macadamia nut markets, providing a natural hedge against domestic currency depreciation.

The tea sector has relatively low competitive fragmentation compared to retail. These fundamentals, combined with the company’s longstanding operational history and brand equity, could provide enough investor confidence to support a successful rights offer provided major shareholders commit and underwriting is secured.

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