Tantalizers Plc Secures N1bn Through Private Equity Placement

Tantalizers Plc, a prominent name in Nigeria’s fast-food industry, has secured over ₦1 billion through a private equity placement, marking a significant step toward addressing its financial challenges.

This development comes after years of financial strain and operational difficulties reflected in the company’s balance sheet.

Recent disclosure to the Nigerian Exchange Group (NGX) confirmed that Messrs Food Specialties and Organics Limited, in collaboration with Banklink Africa Private Equities Limited, have acquired a majority stake in Tantalizers. This acquisition paves the way for strategic restructuring aimed at stabilizing the business.

Following the equity injection, the company reconstituted its board during a meeting held on October 15, 2024, to align leadership with the new investors’ vision. The board welcomed Alhaji Adam Nuru as Chairman, alongside other directors, including Charles Olayemi Ifidon, Oyebode Akinboye, Rob Speiljer, Abimbola Izu, Olusegun Ekundayo, and Dr. Israel Ovirih. Additionally, Eze Nwa-Uwa was appointed as the Acting Company Secretary. These appointments represent a critical step in repositioning the company’s operations to meet its strategic goals.

The private placement resulted in the issuance of 1.79 billion shares, raising ₦1.073 billion at an average share price of 60 kobo. Following the transaction, MessrsFood Specialties and Organics Limited emerged as the largest single shareholder with a 36 percent stake. However, the Ayeni Family retains a combined 37 percent equity, ensuring shared influence over the company’s strategic direction. The remaining 27 percent equity is held by other shareholders, creating a balanced shareholding structure that could foster collaborative decision-making.

Despite the fresh capital injection, Tantalizers continues to face substantial financial challenges. For the nine months ending September 2024, the company recorded a pre-tax loss of ₦231.5 million, while system-wide revenue stood at ₦2.1 billion, with company revenue accounting for ₦842.6 million. The ₦1 billion raised through the equity placement has been placed in short-term deposits, likely reserved for acquisition-related expenditures and restructuring initiatives. This cautious approach underscores the management’s focus on preserving liquidity during this critical phase.

Tantalizers’ liabilities remain a significant concern, with a term loan balance of ₦204.3 million owed to Ecobank and trade and other payables totaling ₦1.29 billion. Of this, ₦85.2 million is attributed to trade creditors, while a substantial ₦215.9 million is owed to board members. Addressing these financial obligations will be a priority for the new management team as it works toward restoring the company’s financial stability.

Looking ahead, Tantalizers has an opportunity to leverage the fresh capital and expertise brought by the new investors to drive growth and enhance its market competitiveness. However, the company faces considerable challenges in a competitive fast-food sector dominated by innovative local and international brands. The restructuring is likely to focus on optimising its outlets, refining product offerings to cater to evolving consumer preferences, and integrating digital strategies to capture Nigeria’s increasingly tech-savvy consumer base.

Resolving outstanding debts and improving operational efficiency will be crucial in stabilising the company’s finances and attracting further investment. With these efforts, Tantalizers aims to reclaim its position as a leader in Nigeria’s fast-food industry, signalling a new era of potential growth and transformation.