Gold Brands, fledgling fast food group and owner of the Chesanyama franchise, has begun to sell off the family silver in a desperate attempt to raise money.
The company has decided to offload its Black Steer franchise business to Laudian, owned by Christopher Leonard van Zyl and Danie van Zyl, for R3.2m. Black Steer’s net asset value was R3.34m as at the end of February 2018.
The move marks a significant departure from recent plans to expand the Black Steer brand globally, along with its flagship Chesanyama franchise.
But Vunani Securities’ analyst Anthony Clark said Gold Brands had “no choice” to stave off bankruptcy other than by selling assets.
“The only value I see is the value of it being a listed JSE shell,” said Clark, which he estimates would be worth between R5m and R6m.
In its delayed results to the end of February, released last week, Gold Brands’ auditors flagged “material uncertainty” that the company remained a going concern, given that its total current liabilities exceeded its total assets by R28.4m.
Operationally, Gold Brands is in deep trouble too: revenue for the year sank to R40.2m from R142.8m the year before, although losses were cut by a third, to R16m. But the company ended the year with just R99,000 in short-term cash.
Laudian will pay an upfront amount of R750,000 in cash, followed by R1.25m on the signing of a sale of business agreement and shareholder approval — which Gold Brands aims to have wrapped up by July 18 — and then R300,000 a month for the four months thereafter.
The company’s other brands include 1+1 Pizza, Opa!Pitaland and Chicken Wild Wings, and it remains under a cautionary as it is still in talks to sell another of its subsidiaries.
Yet the group has continued to press ahead with the introduction of new restaurant concepts: a Latin American outfit called Las Iguanas, a French Bistro red wine bar called Café Rouge and the American-themed Ed’s Diner.
Clark has been leery of Gold Brands from the beginning and its tenure as a public company has been woeful. After listing at 115c a share in February 2016, Gold Brands has traded steadily lower, closing unchanged on Wednesday at 13c.