Restaurant chain operator Jollibee Foods Corp. said Monday it plans to issue up to P12 billion worth of preferred shares in September to revive business growth and strengthen balance sheet.
Jollibee said in a disclosure to the stock exchange it would file with the Securities and Exchange Commission an application to register 20 million redeemable perpetual preferred shares worth P20 billion to be issued over a three-year period.
The initial tranche will involve 8 million preferred shares, with an oversubscription option for another 4 million preferred shares at P1,000 apiece to raise between P8 billion and P12 billion.
Jollibee chief finance officer Ysmael Baysa said the maiden preferred share offering would be used to buy back about $250 million worth of US-dollar denominated perpetual bonds issued in January 2020.
“Once all are executed by December 2021, JFC 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,” Baysa said.
Baysa said the issuance of preferred shares would not change the cash dividend policy on group’s common shares which is to declare as cash dividends 33 percent of net income attributable to common equity holders.
Jollibee said the fund raising activity would also enable it to maintain the capability to finance profitable growth, which is forecasted to accelerate in the coming months and years.
The company earlier announced plans to open 450 new stores this year and at least 500 new stores per year over the next few years.
Meanwhile, shareholders of Jollibee approved the election Kevin Goh and Ee Rong Chong to the board of directors. It is the first time the company has three independent directors.
This is also the first time the company elected foreigners and a female member, reflecting an improvement in its diversity.
“These changes raise the level of corporate governance of Jollibee Foods Corp. particularly the increase in the number of independent directors to three which is consistent with the best practices in the Association of Southeast Asian Nations Corporate Governance,” it said.