Tanganda to re-list on ZSE
IN what could be seen as a move to unlock shareholder value, Meikles Limited has announced plans to separately list its subsidiary Tanganda Tea Company Limited, 14 years after it acquired and de-listed it from the Zimbabwe Stock Exchange.
Yesterday, the Meikles Board released a cautionary statement saying that it is engaged in discussions and is considering various proposals which, if implemented, may have a material impact on the value of the Company’s shares.
“In this regard the directors have determined to unbundle from the Company and separately list on the Zimbabwe Stock Exchange the Company’s agricultural processing business, Tanganda Tea Company Limited,” said company secretary Mr Thabani Mpofu in the statement.
While full details of the transaction(s) are yet to be announced Meikles has already engaged professional advisors on the deal and shareholder approvals will be sought in due course.
If the listing plans are successful, it will mark the direct return to the ZSE of a once sought after stock.
Just before deli-sting, Tanganda was the size of Hippo, TSL and BAT in terms of market capitalisation.
Tanganda was previously listed on the ZSE before it was acquired and de-listed to become part of a conglomerate, the now de-merged Kingdom Meikles Africa Limited.
To be part of this Group, Tanganda was 100 percent acquired by Meikles Africa, which merged the two companies before entering into another bigger merger with Kingdom Financial Holdings Ltd and Cotton Printers.
Interestingly Tanganda and Meikles Africa shared common major shareholders.
Fall out of Kingdom Meikles Africa
Limited
Kingdom Meikles Africa Limited, however, did not last as a Group as shareholder disputes resulted in the demerger of Kingdom Financial Holdings Ltd from Meikles Limited, leaving Tanganda under Meikles Africa to date.
Tanganda as an entity
Tanganda has been steadily growing over the years. The company, which started operations in the 1920s as a tea growing experiment, has the country’s biggest hectarage under tea at approximately 2,244ha, avocado 458ha and macadamia 779ha.
In a previous interview with this publication, financial director Henry Nemaire once boasted that yields that are achieved at Tanganda’s tea estates cannot be matched anywhere in the world.
“We have a yield of 4 500kg per hectare, which is higher than what the Chinese do, which is an average of 1 600kg per hectare.
“If you go to Kenya East, whether its James Finlay (Mombasa) or Williamson Tea Kenya, the average corporates in are producing an average of 3 000kg per hectare.”
He also boasted that local operations are the best in the world in terms of mechanisation.
Apart from its tea estates, Tanganda also produces Tinga Mira, a bottled spring water brand.
How is it performing
In its last published full year results to March 2020, parent company Meikles Africa reported that Tanganda’s export earnings from macadamia nuts, avocadoes and coffee grew by 78 percent from US$ 4,5 million in prior year to US$ 8 million in the year ended 31 March 2020.
As a percentage of total exports, these three crops contributed 43 percent up from 25 percent in the prior year.
Contribution of the high value crops to the Company’s export earnings is expected to rise to 60 percent by March 2022 as the bulk of them reach maturity.
In volume terms, macadamia and avocado export sales grew by 129 percent and 39 percent respectively.
To mitigate the inefficiencies caused by power shortages in the country, the Company plans to install a 7,5 Mega Watt solar project covering all estates and Mutare factory.
A 1,8MW plant at Ratelshoek, Chipinge has already been completed.
Two more solar power plants at Tingamira (1.6MW) and at Jersey (2MW) are under construction.
If no other company lists before Tanganda, it will become the first ZSE listing since Seedco International got a secondary listing in October 2018.