Taste Holdings CEO steps down

Carlo Gonzaga, CEO of Taste Holdings, has resigned and was yesterday succeeded by nonexecutive director Tyrone Moodley.

Gonzaga will remain employed for another six months to support Moodley and the board.

Taste is holder of local rights to 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 10 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 past two years has seen Taste run into financial trouble. 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.

Taste has become a serial capital raiser, recently raising 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.”

He said it’s 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 Pizza, as they were a substantial drain on their financial resources.

The latest rights issue, which will help Taste live to fight for another day, means 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 the 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 Pizza a outlets in 2018.