Tantalizers Plc, one of Nigeria’s pioneering fast-food chains, recently announced a major financial injection through private equity, securing over N1 billion to address longstanding financial challenges and reposition the company.
This development comes amid years of financial strain, as reflected in Tantalizers’ balance sheet, which has shown significant debt and diminishing revenues.
In a recent filing with the Nigerian Exchange Group (NGX), Tantalizers disclosed that Messrs Food Specialties and Organics Limited, along with Banklink Africa Private Equities Limited, have acquired a majority stake in the company.
This capital injection is expected to support strategic restructuring and help the company stabilize operations.
New Board Members and strategic direction
With the acquisition, Tantalizers Plc convened a board meeting on October 15, 2024, to formalize new appointments and initiate a strategic redirection.
The company appointed Eze Nwa-Uwa as Acting Company Secretary and reconstituted its board in alignment with the new investors’ objectives.
Newly appointed board members include:
- Alhaji Adam Nuru – Chairman
- Mr. Charles Olayemi Ifidon – Director
- Mr. Oyebode Akinboye – Director
- Mr. Rob Speiljer – Director
- Mrs. Abimbola Izu – Director
- Mr. Olusegun Ekundayo – Director
- Dr. Israel Ovirih – Director
The company stated that these board appointments mark a pivotal moment, aligning its leadership with new business priorities set by the majority shareholders.
Financial Injection and Shareholding Structure
Tantalizers’ Q1 2024 financial report revealed the receipt of approximately N1 billion in equity funding, listed in its cash flow statement.
The capital injection was achieved through a private placement, with 1,788,372,094 shares issued, raising N1,073,023,256 at an average share price of 60 kobo. The stock currently trades at 60 kobo per share.
- As of September 2024, the company’s updated shareholding structure showed:
- Food Specialties and Organics Limited holding approximately 36% equity
- The Ayeni Family, represented by three shareholders, retaining a combined 37%
- Remaining shareholders holding 27% of company equity
While Food Specialties is now the largest single shareholder, their shareholding does not yet grant them full control, indicating a shared influence on strategic decision-making with the Ayeni Family.
Current financial health and operational performance
Despite the equity injection, Tantalizers remains in a challenging financial position, recording a pre-tax loss of N231.5 million for the nine months ending September 2024.
- System-wide revenue for the period was N2.1 billion, while company revenue stood at N842.6 million.
- These figures highlight both the ongoing operational hurdles and the potential market demand that could be leveraged under effective restructuring.
- Tantalizers’ financial reports also suggest that the N1 billion equity raised has been placed in short-term deposits, likely as the company prepares for acquisition-related expenditures and restructuring efforts.
- This interim measure indicates a cautious approach by the new stakeholders, focusing on preserving liquidity while developing a long-term recovery plan.
Debt and liabilities snapshot
The company’s liabilities remain substantial, with a term loan balance of N204.3 million, held with Ecobank, and trade and other payables amounting to approximately N1.29 billion.
- Notably, only N85.2 million of this sum is attributed to trade creditors, while the remaining balance includes a substantial sum of N215.9 million owed to board members.
- This structure reveals complex internal financial obligations, and addressing these debts will likely be a priority for the new management team.
What lies ahead
With new private equity investors, Tantalizers Plc has an opportunity to leverage fresh capital and expertise to drive growth, improve operational efficiency, and enhance market competitiveness.
- The challenges, however, are significant. The fast-food chain operates in a highly competitive sector dominated by both local and international brands, which have consistently pressured traditional operators like Tantalizers to innovate and streamline operations.
- The restructuring will likely focus on optimizing outlets, revising product offerings, and potentially adopting new digital strategies to appeal to Nigeria’s increasingly tech-savvy consumer base.
- Additionally, the company must address its substantial debts to restore financial health and attract further investment.
