Tanga cement rights issue for debt, expansion

TANGA: TANGA Cement Plc has rolled out the country’s largest-ever rights issue, seeking to raise 204bn/- to settle foreign-denominated debt, strengthen its balance sheet and pave the way for future expansion.

Trading as Simba, the cement maker’s month-long offer, launched in Dar es Salaam yesterday, surpasses CRDB Bank’s landmark 152bn/- rights issue launched a decade ago.

Shareholders can purchase new shares at 1,600/- each—representing a 38.2 per cent discount from the prevailing market price of 2,590/-.

The Capital Markets and Securities Authority (CMSA) Chief Executive Officer, Mr Nicodemus Mkama, said the authority is pleased with Tanga Cement’s ongoing strategic initiatives, including reducing foreign-denominated debt, increasing revenue and profits and providing greater investment opportunities for shareholders and the general public.

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“The issuance of rights shares by Tanga Cement is a solid step toward expanding investment opportunities and enhancing shareholder value,” he said.

CMSA has approved Simba Cement’s prospectus to sell 127,342,090 rights shares to its shareholders at 1,600/- per share, on a ratio of two new shares for every one existing share.

Tanga Cement Managing Director, Alfonso Velez, described the current rights issue as a vote of confidence in both the company and the country’s economic direction.

“We are positive about the marketing development process,” Mr Velez said, adding that the company sees growth opportunities across the cement value chain.

iTrust Finance, CEO Faiz Arab said the rights issues “is not merely a fundraising exercise” rather a dedicated step to optimise Tanga Cement capital structure, unlocking new growth and maiximise long-term shareholders’ value.

“For shareholders, this represents a preferential opportunity to reinvest in proven growth story at a crucial turning point,” Mr Arab said. iTrust is a leading brokerage firm.

Solomon Stockbrokers reported that after Scancem International D.A., the majority shareholder of Twiga Cement, bought most of Tanga Cement’s shares from AfriSam Cement in November 2023 at 2,441/42 per share, no date has been set for acquiring the remaining shares from minority shareholders.

In 2002, Tanga Cement became the first cement company to be listed on the Dar es Salaam Stock Exchange (DSE), trading under the symbol TCCL.