Tantalizers Plc successfully raised an estimated N1.07 billion through a private placement, as the fast food chain continues its restructuring plans.
The company has negative retained earnings of about N4.2 billion and has been struggling with back-to-back losses for years.
However, an injection of fresh capital is expected to give the company a lifeline as it continues with its corporate restructuring plans.
Private Placement
The company disclosed that its offering of 1,788,372,094 ordinary shares, priced at N0.60 each, achieved 100% subscription. The stock trades at around 36 kobo per share.
This private placement opened on January 25, 2024, and closed on February 9, 2024, according to a report reviewed by Nairametrics.
Iron Global Markets Ltd served as the sole issuing house for this transaction.
Notably, the company received a single application for all the offered shares, leading to a full subscription and allotment.
This indicates that the private placement might have been acquired by just one investor, details of whom were not disclosed.
“The one application for a total of 1,788,372,094 ordinary shares was found to be valid, accepted and processed accordingly leading to 100% subscription and 100% allotment,” the company said.
However reliable sources suggest the acquirer is an institutional investor with foreign affiliation but with a local presence in the country.
The deal was yet to be reported on the NGX as at press time.
At the Extraordinary General Meeting held on December 22, 2022, in Lagos, Tantalizers’ shareholders authorized the board of directors to issue these shares, constituting approximately 36% of the company’s then-existing share capital, on a pari-passu basis with existing shares.
Financial Performance
Tantalizers Plc, like other fast-food companies in Nigeria, faces significant challenges amid a tough economic climate marked by socio-economic difficulties.
- The company has been adversely affected by increased tariffs, double taxation, depreciation of the naira, and ongoing insecurity in certain regions, which have forced a cutback in its expansion efforts.
- These operational challenges have been exacerbated by reduced consumer spending due to strained household finances, impacting many consumer goods companies across Nigeria.
- As a result, Tantalizers has seen an increase in its cost of sales and administrative expenses, contributing to a decline in its income.
- Despite returning to profitability in 2017, Tantalizers slid back into a loss in the first quarter of 2018 and has remained unprofitable since.
For 2023, Tantalizers recorded its fourth consecutive annual loss, with its after-tax losses widening to N290.74 million from N264.09 million the previous year.
- Although revenue increased slightly to N1.17 billion from N1.16 billion, and the cost of sales decreased to N742.27 million from N748.18 million, the financial strain remains evident.
- The company’s statement also highlighted that system revenue rose to N2.64 billion from N2.43 billion, driven by sales at franchisee-owned outlets totaling N1.41 billion and company-owned outlets accounting for N1.22 billion.
- Other income fell to N152.02 million from N478.5 million, while distribution costs and administrative expenses also declined.
As of the last trading day on May 7, 2024, Tantalizers’ shares were priced at N0.36 each on the Nigerian Stock Exchange (NGX), reflecting a 7.7% decrease from the previous closing price of N0.39.
The company started the year at N0.47 per share but has since seen a 23.4% drop in its share value.
