Tanganda, Zimbabwe’s iconic tea and fruit exporter, may soon be under Innscor’s control via a proposed US$8 million rights issue.
Tanganda says it is still struggling to recover from the twin shocks of COVID-19 and the El Niño drought, which left it with a deficit of US$6.36 million. The company is now going back to shareholders to raise funds to replace equipment, link its three solar plants to the grid, set up a macadamia cracking unit, buy delivery trucks for its beverage division, and cover working capital needs.
But the identity of the underwriter hints at a bigger change. Rutanhi Beverages, the beverage arm of Innscor, is underwriting the rights offer. This means that if Tanganda’s current shareholders do not fully subscribe, Rutanhi will buy the remaining shares. If Rutanhi’s stake exceeds 35%, it will have to buy out the remaining shareholders under listing rules. But, even if that level is not reached, Rutanhi plans to make a voluntary offer to minority shareholders anyway. This will pave the way for Innscor to gain majority control and integrate Tanganda’s tea, macadamia, and avocado operations into its consumer goods empire.
Tanganda explains: “This intention reflects Rutanhi’s long-term strategic commitment to the business while ensuring compliance with applicable legal and regulatory frameworks.”
The Competition and Tariff Commission (CTC) has issued a “comfort letter”, a preliminary nod allowing the rights issue to proceed. If Rutanhi ends up with a large enough stake, as expected, a formal merger notification will then be needed.
“If the outcome of the rights offer results in the applicable merger notification thresholds being met, the Proposed Transaction will be notified to the CTC, which will then issue its final determination, including any conditions that may be imposed.”
Rutanhi manages Innscor’s profitable beverage investments, including Prodairy, Probottlers, Buffalo Brewing, Mafuro Farming, and Prodistribution. Through these companies, Rutanhi controls some of Zimbabwe’s most loved homegrown beverage brands, including Life, Revive, Bally House, Fizzi, and Nyathi beer. If successful, Innscor will add to its portfolio beverage brands such as Tanganda, Tingamira, Stella, Nella Rooibos, in addition to Tanganda’s tea and fruit estates.
Currently, Tanganda is majority owned by the Meikles family, with a 49% stake, followed by Mega Market, which holds 10%.
