Carlo Gonzaga, the CEO of Taste Holdings, has resigned from the fast food specialist and will be succeeded by non-executive director Tyrone Moodley from February 12.
Taste announced on Monday that Gonzaga will remain employed by the company for another six months to support Moodley and the board.
Taste is holder of local rights to both iconic global brands Starbucks and Domino’s Pizza and operates a luxury jewellery business, comprising Arthur Kaplan, World’s Finest Watches, and NWJ.
Gonzaga and his father, Luigi, were part of the team that founded Taste more than ten years ago in Durban, with business starting off with Scooters Pizza before adding other eateries to its stable.
The expansion of Starbucks and Domino’s Pizza over the last two years has seen Taste run into financial troubles.
It faces a bloated debt load of R255 million that exceeds its cash on hand of R86.1 million in the six months to August 2017 and widening losses of R66 million.
The fast food specialist has become a serial capital raiser, as it recently raised R389 million through a rights issue underwritten by Riskowitz Value Fund (RVF) pitched at 90 cents/share.
The fund scored itself dominant control of Taste through the rights issue, raising its stake to 64.5% in Taste. RVF, which has been a shareholder in Taste since 2010, promised big changes and a shake-up in the company after the rights issue.
Said Gonzaga on his resignation: “Given the recent changes to the board and shareholding I am of the view that the time [to resign] is now.
“I have worked with Tyrone for seven years, first as shareholder and, more recently, as a colleague on the board and am excited by the perspective he will bring as a leader.”
He said it was time for Taste to have fresh “eyes and legs”.
However, three sources have told Moneyweb that Gonzaga was under a lot of pressure with the roll out of both Starbucks and Domino’s, as they are a substantial drain on their financial resources.
The latest rights issue, which will help Taste fight for another day, means that it has raised nearly R1 billion through share-for-cash placements and rights issues in three years.
Some Taste shareholders didn’t support the latest rights issue given how the company has burnt cash it has raised in the market with its gamble on global food brands.
The rights issue will help Taste roll out a further 12 Starbucks and Domino’s outlets in 2018.
Moodley has been a non-executive director of Taste since October 2016 and is a senior advisor to Protea Asset Management, the investment advisor to RVF.