Fastfood chain operator Jollibee Foods Corp (JFC) is re-evaluating plans to raise P8 billion from preferred shares offering as the growth of the domestic business turned out to be faster than expected.
JFC chief finance officer Richard Shin said in a recent media briefing the preferred shares offering was supposed to fund the growth of its Philippine business.
The domestic business has been growing much faster than the company’s planned growth, he said. Shin said interest rates also had yet to come down.
“We don’t know how much we really need in terms of preferred shares because our business is actually growing much faster,” Shin said.
“So, we are going to re-evaluate, and we are going to consider if we need to do the preferred [shares offering], understanding that interest rates have not come down yet,” he said.
Shin said it might not be the right time to be locked in a fixed rate at the moment, ahead of the potential monetary easing.
He said the company might also look at other debt instruments that are more viable to take advantage of upcoming lower interest rates.
“We have many banks and institutions that are willing to finance us. So, we are looking at all the options at the moment,” Shin said.
JFC disclosed in March that its board approved the plan to sell between 5 million and 8 million preferred shares at P1,000 each. This will enable the company to raise between P5 billion to P8 billion in fresh capital. Jenniffer B. Austria
It engaged BPI Capital Corp., Chinabank Capital Corp. and BDO Capital & Investments Corp. as joint underwriters for this transaction.
JFC issued peso-denominated preferred shares in 2021, raising P12 billion from 3 million Series A preferred shares with a dividend rate of 3.2821 percent per annum and 9 million Series B preferred shares with an annual dividend rate of 4.2405 percent.
Shin earlier said the company would fund the acquisition of a 70-percent stake in South Korean coffee chain Compose Coffee through internally generated cash and borrowings.
Jollibee Group operates 6,886 stores worldwide, including 3,337 in the Philippines and 3,549 overseas.
