Tanga Cement Plc has received a 16-month loan repayment moratorium from its major shareholder as part of the latest measures to sustain its operations, according to the company’s 2024 annual report.

Details of the debt restructuring plan show that the cement maker, listed on the Dar es Salaam Stock Exchange (DSE), will not make any interest or principal payments on the Tsh293.32 billion ($116.66 million) loan it acquired from Heidelberg Materials AG from August 30, 2025 until December 31, 2026.

The loan proceeds were used to finance the construction of the new Kiln 2 production line, the company noted.

The moratorium is intended to strengthen the operations of the loss-making firm, which trades under the Simba brand.

Challenges in repaying Heidelberg Materials AG have created material uncertainty that casts doubt on the group’s ability to continue as a going concern, the company admitted.“The directors and majority shareholder have a common understanding that the loss and liquidity constraints are caused by the impact of the Heidelberg Materials AG loan on the Group’s and the Company’s financial results and position. Otherwise, the Group and the Company are solvent with positive net cash flows from operations, which are expected to continue for the foreseeable future,” the company said.

Heidelberg Materials AG, which owns 68.33 per cent of Tanga Cement through its Norwegian subsidiary Scancem International DA, reaffirmed its commitment to the company’s recovery in a letter of financial support dated June 27, 2025.“This support was reinforced by an amendment dated July 3, 2025, which extended the termination date of the existing Standstill and Amendment Agreement from August 30, 2025 to December 31, 2026, with all original provisions remaining in effect,” the report said.

As a result, the company continues to benefit from waived covenant compliance, enforcement restrictions, and a moratorium on repayment obligations throughout the revised standstill period.

Heidelberg’s letter also expressed its intention to provide financial assistance as needed to enable Tanga Cement to meet its operational and financial obligations for at least 18 months from June 27, 2025.

Heidelberg Materials acquired its 68.33 per cent stake in Tanga Cement from South Africa’s AfriSam (Mauritius) Investment Holdings Ltd in 2021.

Meanwhile, Tanga Cement is pursuing a capital restructuring initiative to strengthen its balance sheet and reduce debt to more sustainable levels.

Engagements with shareholders, regulatory bodies and financial advisers are ongoing, and management expects to finalise this process as soon as possible,” the company said.

In the quarter to June 2025, Tanga Cement reported a profit of Tsh679,106 ($270), a sharp improvement from a loss of Tsh14.65 million ($5,828) in the previous quarter (January–March).“The directors expect that the positive business fundamentals will support the Group’s and the Company’s turnaround strategy in terms of operations and the financing structure, with the aim of mitigating the impact of the loan on financial results and liquidity,” the company said.

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