This funding infusion follows several years of financial challenges, as reflected in Tantalizers' balance sheet, which has been burdened by significant debt and declining revenue streams.
In a recent official announcement to the Nigerian Exchange Group (NGX), Tantalizers disclosed that Messrs Food Specialties and Organics Limited, in collaboration with Banklink Africa Private Equities Limited, has acquired a majority stake in the organization.
The influx of capital is anticipated to facilitate strategic restructuring and stabilize the company’s operations.
Following the acquisition, Tantalizers Plc convened a board meeting on October 15, 2024, to formalize new leadership appointments and initiate a strategic realignment.
Eze Nwa-Uwa has been designated as the Acting Company Secretary, and the board has undergone restructuring to align with the objectives of the new investors.
The newly appointed board members are:
- 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 organization underscored that these board modifications signify a substantial transformation, aligning its leadership with the new strategic objectives set forth by the majority shareholders.
Tantalizers' financial statement for the first quarter of 2024 revealed the acquisition of approximately N1 billion in equity funding, as evidenced in its cash flow statement.
This capital injection was secured via a private placement, resulting in the issuance of 1,788,372,094 shares and generating N1,073,023,256 at an average share price of 60 kobo. The stock is presently trading at 60 kobo per share.
As of September 2024, the revised shareholding structure of the company indicates:
- Food Specialties and Organics Limited holds approximately 36% of the equity.
- The Ayeni Family, represented by three shareholders, collectively retains 37%.
- Other shareholders account for the remaining 27% of the equity.
Although Food Specialties is now the largest individual shareholder, their stake does not confer full control, suggesting a collaborative influence on strategic decisions alongside the Ayeni Family.
Despite this equity boost, Tantalizers continues to face significant financial challenges, reporting a pre-tax loss of N231.5 million for the nine months ending September 2024.
The total revenue for the period reached N2.1 billion, with the company's revenue at N842.6 million. These figures underscore the persistent operational difficulties and the potential market opportunities that could be harnessed through effective restructuring.
Additionally, Tantalizers' financial reports indicate that the N1 billion raised in equity has been allocated to short-term deposits, likely in preparation for acquisition-related costs and restructuring initiatives. This strategy reflects a prudent approach by the new stakeholders, emphasizing liquidity preservation while formulating a long-term recovery strategy.
The company's liabilities remain considerable, with a term loan balance of N204.3 million owed to Ecobank and trade and other payables totaling approximately N1.29 billion.
A significant portion of this total, specifically N85.2 million, is linked to trade creditors, whereas the larger amount of N215.9 million is owed to board members. This distribution highlights intricate internal financial responsibilities, indicating that resolving these debts will probably be a key focus for the incoming management team.
Tantalizers Plc is poised to capitalize on new private equity investments, which present an opportunity to access additional capital and expertise aimed at fostering growth, enhancing operational efficiency, and boosting market competitiveness.
Nonetheless, the company faces considerable challenges. The fast-food industry is intensely competitive, with both local and international brands exerting constant pressure on traditional players like Tantalizers to innovate and improve their operations.
The planned restructuring will focus on enhancing store performance, reviewing the product portfolio, and potentially introducing digital strategies to cater to Nigeria's growing tech-savvy consumer base. Additionally, addressing the company's substantial debt is essential to reestablish financial stability and attract further investment.