Jollibee Foods Corp. is re-evaluating earlier plans to sell preferred shares to raise capital funds for expansion purposes owing to its domestic business growing faster than expected.
JFC chief finance officer Richard Shin said this relates to plans of selling preferred shares to buttress the finances of its home business and further its growth.
“It’s a good surprise and good to have, but our growth in the Philippines is faster than our planned growth, which is to say we don’t know how much we really need in terms of preferred shares. So we’re re-evaluating,” Shin said.
The JFC in March planned a public sale of additional preferred shares of 5 million with an option for oversubscription of up to 3 million shares.
The shares will be sold at P1,000 a share to raise up to P8 billion if the oversubscription option was fully exercised. These will be cumulative, non-voting, nonparticipating, non-convertible, redeemable, peso-denominated perpetual preferred shares.
“JFC is undertaking this funding transaction to maintain strong capital structure, robust leverage position, and optimize liquidity by managing maturities of financial obligations. A portion of the net proceeds from the offering will be used to refinance financial obligations including JFC’s callable Series A preferred shares due in October 2024 and for other general business purposes,” it said earlier.
Shin said the company needs to look at the offering since interest rates have not come down yet.
According to Shin, JFC is looking at other more flexible fund raising mechanisms “to take advantage of lower interest rates that we know are coming,” including from banks and financial institutions who are willing to finance the business.
He also said no part of the preferred share sale proceeds will be used to finance the company’s $340 million acquisition of the South Korean coffee chain Compose Coffee Co. Ltd.
Fifty-three percent of the required financing will be paid in cash and the other 47 percent as debt.
“We’ve identified the banks that we’re going to work with,” Shin said of this other transaction.
Wholly owned JFC subsidiary Jollibee Worldwide Pte. Ltd. previously signed definitive agreements for acquiring 70 percent of Compose Coffee and JMCF Co. Ltd. collectively called Compose Coffee.
