Jollibee eyes $300-M 5-yr bond issuance
Tycoon Tony Tan Caktiong-led Jollibee Foods Corp. (JFC) plans to raise at least $300 million from its upcoming overseas bond offer meant to repay a maturing loan.
Richard Shin, chief financial officer (CFO) of JFC, told reporters during a media briefing on Tuesday that going below this amount would make it “very hard to get attraction from some of the larger investors.”
“We wanted to do it in the proper way to make sure that potential investors out there have the best vehicle to invest in us,” Shin said.
This comes a day after JFC announced plans to tap the offshore debt market for its Regulation S senior unsecured notes. The issuance will have a tenor of five years.
Regulation S notes are debt securities offered and sold outside the United States. While JFC’s notes are unsecured, this will allow investors to have a higher claim in case of bankruptcy.
According to Shin, they had a $300-million senior bond due in January 2026, and JFC will use proceeds from the upcoming notes offer to repay this.
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.’s Singapore Branch will be the joint lead managers and bookrunners.
Last year, JFC canceled plans to raise P8 billion from a preferred share offer, citing its “strong profit performance and cash flow generation.”
At the same time, Shin said they did not plan to acquire other brands in JFC’s plan to expand its store network this year by up to 800 branches across the globe.
“The 700 to 800 [store expansion target] is all organic, so there is no acquisition play in that number,” the CFO said.
JFC will mostly focus on opening more stores under its flagship Jollibee brand, as well as Tim Ho Wan, Compose Coffee and Smashburger, among others.
As of end-December, the group had 9,766 stores worldwide, representing a 41.8-percent increase year-on-year.
JFC’s plan to spend as much as P21 billion to open 800 new stores will bring its network well past the 10,000 mark.
Last year, the company’s earnings climbed by 17.7 percent to P10.32 billion on strong sales in its Philippine and international businesses, as well as fresh gains from South Korea-based Compose Coffee.
