ChesaNyama. Picture: Sunday Times/Masi Losi
ChesaNyama. Picture: Sunday Times/Masi Losi

Shareholders in struggling fast-food brands group Gold Brands Investments look set for slim pickings after the resignation of CEO Praxia Nathanael at the weekend.

Nathanael is a co-founder of Gold Brands as well as its flagship brand ChesaNyama. She was also a prime mover in The Fish & Chips Co, acquired by Taste Holdings several years ago.

Gold Brands said Nathanael’s resignation was due to the ongoing restructuring of the company. Her departure follows the resignations of nonexecutive directors Rowan Fortuin last September and Christos Kassianides last December.

Offering a restructuring process as a reason for Nathanael’s resignation may sound euphemistic to shareholders, considering that Gold Brands shares have been suspended since early August last year.

The JSE suspended the shares after the annual report was not delivered to shareholders within the stipulated four-month period after the close of the February 2018 financial year.

Earlier this month the JSE applied to terminate the Gold Brands listing on April 29.

Praxia Nathanael: Resignation was ‘due to the ongoing restructuring of the company’. Picture: SUPPLIED
Praxia Nathanael: Resignation was ‘due to the ongoing restructuring of the company’. Picture: SUPPLIED

The termination – coupled with Nathanael’s resignation — could leave shareholders hanging after a deal clinched in February to sell the ChesaNyama brand to Laudium Future Equity for about R14m. Laudium was also involved in buying the Black Steer steakhouse brand from Gold Brands last year in June.

Gold Brands, which only listed in 2016, has been in heaps of financial trouble. Results for the financial year to end-February 2018 — the last set of results issued by the company — were awash with red ink. While gross profits of R15m were generated from revenue of R40m, operating expenses (a hefty R40m) and finance costs smacked the bottom line R16m into the red.

The real problem, however, was on the balance sheet, where current assets of R18.5m did not come close to covering current liabilities of R47m.

If the sale of the ChesaNyama chain — of which only R250,000 has been paid over — goes through, there will be staggered payments of R1m when the deal is signed, another R6.25m on the closing date and R2.5m 30 days after the closing date. Two more payments of R4m each will be made 60 days and 90 days after the closing date.

At the time Gold Brands said the ChesaNyama sale proceeds would be used to increase cash flow, settle debt and assist in rolling out new and existing brands.

The company said its future focus would be on the restaurant and casual dining segment, spearheaded by the recently acquired North Sea restaurants brand.