Jollibee eyes P8 billion share sale this year

MANILA, Philippines — Asian food conglomerate Jollibee Foods Corp. (JFC) plans to push through this year with its P8-billion fundraising through the issuance of preferred shares, proceeds of which will be used to refinance financial obligations and support expansion in the coming years.

JFC last month secured approval from its board to offer additional five million preferred shares with an oversubscription option of up to three million preferred shares at P1,000 apiece.

“The timing is this year,” JFC CFO Richard Shin said.

Of the P8 billion, Shin said P3 billion will be used to refinance financial obligations.

“The other P5 billion, we’ll preserve for expansion and growth projects, including growth in Philippines, which has a very good return for us,” Shin said.

“But if there are certain very high return, lower risk in our categories that makes sense in terms of growth, we will possibly look at those opportunities, but the fund is really there to help us grow in the next several years. So we’ll be very careful with that money and we’ll make sure that it gets allocated not to expenses but rather to investments,” he said.

JFC plans to open 700 to 750 owned and franchised stores for this year and expects capital expenditures to be in the range of P20 billion to P23 billion.

Shin said 80 percent of the target new stores would be located abroad, while the other 20 percent will be in the Philippines.

“Why? Because we’re catching up in international compared to Philippines. And also international has 7.7 billion people. Philippines is 100 million people. So the 80-20 rule seems to work well with these 700 stores,” he said.

In terms of categories, Shin said about a third of the new stores will be in the coffee and tea space which is composed of Coffee Bean & Tea Leaf, Highlands Coffee and Milksha.

“The coffee and tea space, they intend to have a faster payback per store. And the reason is that we don’t have a full kitchen so the store design is different, the cost to build is different so the payback is quicker,” he said.

As for the remaining new stores for this year, Shin said they would be comprised of the chicken and Chinese cuisine categories.

JFC’s store network as of end February stood at 6,902 stores worldwide, consisting of 3,336 in the Philippines and 3,566 abroad.

The issuance planned for this year represents the second tranche of JFC’s 20 million preferred shares approved by the Securities and Exchange Commission in 2021 under shelf registration.

JFC in 2021 raised P12 billion in its preferred shares offering, which was almost three times oversubscribed.