Fast food chain operator Jollibee Foods Corp. (JFC) said Monday it plans to raise up to P8 billion from the issuance of preferred shares to repay debt and finance its expansion program.
JFC said in a disclosure to the stock exchange its board approved the issuance of 5 million preferred shares with an oversubscription option for another 3 million preferred shares at P1,000 apiece. The dividend rate and other terms of the planned offering will be determined at the time of pricing of the offering.
“JFC is undertaking this funding transaction to maintain strong capital structure, robust leverage position, and optimize liquidity by managing maturities of financial obligations,” the fast food chain said.
“A portion of the net proceeds from the offering will be used to refinance financial obligations including JFC’s callable Series A preferred shares which is due in October 2024 and for other general business purposes,” it said.
The preferred shares will be issued as second and final tranche from the company’s 20 million preferred shares shelf-registration approved by the Securities and Exchange Commission in 2021.
It issued P12 billion worth of preferred shares in 2021, which consisted of three 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.
It used the proceeds for the partial buyback of its senior perpetual securities and for general corporate purposes such as commissary and store expansion.
The second tranche of preferred shares will be listed on the Philippine Stock Exchange subject to regulatory approval, similar to the first tranche.
JFC said this offering would not affect the group’ current cash dividend policy of declaring 33 percent of net income attributable to common equity holders of the parent company as dividends to shareholders.
It engaged BPI Capital Corp., Chinabank Capital Corp. and BDO Capital & Investments Corp. as joint underwriters for this transaction.
JFC’s store network reached 6,885 stores worldwide, up 6.3 percent compared to a year ago as of end of December 2023.