JFC to tap offshore debt market to fund expansion
Homegrown fast-food giant Jollibee Foods Corp. (JFC) will raise funds from the overseas debt market amid plans to expand its store network beyond the 10,000 mark this year.
In a stock exchange filing on Monday, JFC said its wholly owned subsidiary, Jollibee Worldwide Pte. Ltd., had tapped several banks for a potential Regulation S dollar-denominated bond offer.
The issuance will have a tenor of five years.
Regulation S notes refer to debt securities offered and sold outside the United States.
JFC’s offer will also consist of senior unsecured notes, meaning these will not be backed by a specific collateral in case the company defaults, although investors will have a higher claim.
The notes are guaranteed, entailing that the guarantor promises to repay the loan should JFC default.
JP Morgan Securities Asia Pte. Ltd. and Morgan Stanley Asia (Singapore) Pte. will be the joint global coordinators and joint bookrunners, JFC said. BPI Capital Corp. and The Hongkong and Shanghai Banking Corp. Ltd., Singapore will be the joint lead managers and bookrunners.
Meetings
According to the company led by tycoon Tony Tan Caktiong, these banks will arrange a series of fixed-income investor meetings beginning on Monday.
This comes after JFC unveiled plans to spend P21 billion this year to open as many as 800 stores, which would zoom its network past the 10,000-store mark.
As of end-December, the group already has 9,766 stores, representing a 41.8-percent increase year-on-year.
Higher earnings
Strong sales in its Philippine and international businesses, as well as gains from its newest coffee acquisition, lifted JFC’s earnings last year by 17.7 percent to P10.32 billion.
Revenues likewise grew by a tenth to P269.94 billion, supported by system-wide sales climbing by 13 percent to P390.28 billion.
The Philippine business grew sales by 10.1 percent, driven by the flagship brand Jollibee, Chowking and Mang Inasal. International sales expanded by 17.6 percent. South Korea-based Compose Coffee, which JFC took over last year, contributed 7.9 percent to the global system-wide sales growth.
