SEC clears Jollibee's planned preferred shares offer
MANILA, Philippines — Homegrown food giant Jollibee Foods Corp. has received the go signal from corporate regulators for its plan to raise cash through the sale of preferred shares to pay debts and fund its business expansion goals.
In a statement on Friday, the Securities and Exchange Commission said it cleared Jollibee’s plan to sell 20 million preferred shares at a price of P1,000 each. It is the first time in the company's history to make such an offer, which is also a first in the food service industry in the Philippines.
Unlike common stocks, preferred shares do not give shareholders voting rights. But preferred stockholders are paid with regular dividends that common shareholders may not enjoy.
According to the SEC, Jollibee may sell 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 in case of strong investor demand.
Including the overallotment option, Jollibee is expected to rake in P11.9 billion in net proceeds from the first round of the offer, which is set to happen from September 28 to October 4.
A portion of cash to be raised will be used to buy back around $250 million out of $600-million perpetual securities that Jollibee issued in January last year. Some of the money will also go to capital expenditures for its commissary and new store expansion.
Once the offer is completed, Jollibee said it would have “fewer debt obligations, more distributed financial maturities over the next few years, lower foreign exchange risks, and better leverage and debt servicing ratios.”
On Friday, shares in Jollibee lost 3.43% to close at P197 each.
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