Jollibee eyes issuance of preferreds, buyback of dollar perpetuals

By Marisa Wong

Los Angeles, May 14 – Philippines’ Jollibee Foods Corp. said its board of directors approved plans to issue Philippine peso-denominated preferred shares and to repurchase some of its dollar-denominated perpetual bonds through a cash tender offer sometime in 2021.

The amount of the planned preferred share issuance is estimated at PHP 8 billion, and the amount of the perpetual bonds buyback could reach up to $250 million, according to a press release.

Jollibee said its objective is to restructure its financial obligations in order to strengthen its balance sheet, spread the maturity of its financial obligations and reduce its foreign exchange risks. The company added that this is also part of its action steps to reduce its debt and financing cost as its businesses in different parts of the world recover from the impact of the pandemic.

The company said it will apply for a shelf registration of up to PHP 20 billion of peso-denominated cumulative non-voting non-participating perpetual preferred shares with planned initial issuance of PHP 8 billion in 2021.

The initial series will include an oversubscription option for PHP 4 billion of preferred shares and will be issued in up to two subseries and may have step-up dividend rates if they are not redeemed within three years or five years.

In addition to buying back some of its dollar-denominated perpetual bonds, Jollibee plans to reduce its other financial obligations in the form of bank loans in 2021.

In January 2020, wholly owned subsidiary JWPL (Singapore) had issued $600 million of perpetual bonds due 2025, and in June 2020 it had sold $300 million of senior debt securities maturing in 2026 and $300 million of senior debt securities due 2030.

Proceeds of $400 million from the perpetual bond were used to pay off short-term loans used mostly for the acquisition of Coffee Bean & Tea Leaf in September 2019, while those from the senior debt securities served as a contingency measure against any unforeseen impact of a prolonged pandemic.

The new issuance is subject to shareholders’ approval at an upcoming meeting as well as approval by the Philippine Securities and Exchange Commission. This preferred issuance will be the first by Jollibee and one of the first in the food service industry in Asia, the company noted.

Jollibee is a food service company based in Pasig City, Philippines.

© 2015 Prospect News.
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