Tanga Cement Plc has secured a 16-month moratorium on loan repayments from its majority shareholder Heidelberg Materials AG, providing the loss-making firm with vital breathing space to sustain operations.
According to the company’s 2024 annual report, Tanga Cement will not make principal or interest payments on its TSH293.32bn (US$116.7m) loan between 30 August 2025, and 31 December 2026. The facility, extended by Heidelberg to finance the Kiln No2 production line, has weighed heavily on the company’s financial position.
“The directors and majority shareholder have a common understanding that the loss and liquidity constraints are caused by the impact of the Heidelberg loan,” the report noted. “Otherwise, the Group and the Company are solvent with positive net cash flows from operations.”
Heidelberg, which holds a 68.33 per cent stake in Tanga Cement through its Norwegian unit Scancem International DA, reaffirmed its backing in a 27 June 2025 letter of financial support. The support was reinforced by a 3July amendment extending the standstill agreement until December 2026, maintaining waivers on covenant compliance and repayment obligations. Heidelberg also signalled readiness to provide further financial assistance for at least 18 months.
Alongside the moratorium, Tanga Cement is pursuing a capital restructuring plan to strengthen its balance sheet and cut debt to sustainable levels. Discussions with shareholders, regulators, and advisers are underway.
In the 2Q25, the cement maker posted a small profit of TSH679,106 (US$270), reversing a first-quarter loss. Management expressed confidence that improved fundamentals will underpin its turnaround strategy.
