JFC to start selling preferred shares

Jollibee Foods Corp.’s (JFC) offer period for its P12-billion perpetual preferred shares, which it will list on the Philippine Stock Exchange (PSE) next month, will start on Tuesday.

The company said the preferred shares offering is part of the P20 billion in shelf registration approved recently by the Securities and Exchange Commission (SEC).

Jollibee may issue the preferred shares in one or more tranches within a period of three years. For the first tranche, the company will offer up to P8 billion worth of preferred shares, with an overallotment option of up to P4 billion.

The first tranche of offering will be under the trading symbol JFCPA for the series A preferred shares, which will have a fixed rate of 3.2821 percent per annum, and JFCPB for the series B which will have a fixed rate of 4.2405 percent.

The offer period will start at 9 a.m. on September 28 and end at 12 noon on October 4, subject to the right to extend or terminate the offer period with the approval from the SEC and PSE.

Jollibee’s share sale is composed of 3 million in series A preferred shares and 9 million in series B preferred shares both at an offer price of P1,000 apiece.

The company intends to use some P9.91 billion of the proceeds to buy back a portion of the outstanding $600 million or about P30.58 billion in senior perpetual securities issued by Jollibee last year.

The company, through Jollibee Worldwide Pte. Ltd., issued the said security on January 23, 2020 and was listed in the Singapore Exchange Securities Trading Ltd. The securities offered an initial distribution rate of 3.9 percent, noncallable in five years and payable semi-annually. This offer was not registered with the Philippine SEC because the offer involved an entity outside of the Philippines and the shares were offered outside of the Philippines.

Proceeds from issuance of the senior perpetual securities were partially used to refinance the short-term debt from the acquisition of The Coffee Bean & Tea Leaf. The securities are guaranteed by the company.

Meanwhile, about P1.09 billion of the proceeds will be used as its capital expenditures for the commissary operations of Jollibee’s wholly owned subsidiary, Zenith Foods Corp. which is planning to build a new commissary in Cebu to support its growing business in the Visayas and Mindanao.

The new commissary will support the requirements of various brands including Jollibee, Greenwich, Chowking and Red Ribbon. The funds shall be provided by Jollibee Group through an equity infusion.

Some P893 million will be used for the new stores of its units Fresh N’ Famous Inc., Red Ribbon Bakeshop Inc. and PERF Restaurants Inc. The funding shall be given to the subsidiaries in the form of equity infusion.

In the fourth quarter of 2021, the group targets to open between 15 to 25 company-owned stores in Luzon, while there will be a total of between three to seven company-owned stores to be opened in Visayas and Mindanao.

Next year, about 40 to 60 company-owned stores are planned to be opened with roughly the same new store count mix by region.

BPI Capital Corp. was hired as the issue manager for the transaction, which will also serve as joint lead underwriter and bookrunner alongside with BDO Capital and Investment Corp., China Bank Capital Corp. and SB Capital Investment Corp.

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