By Denise A. Valdez
Jollibee Foods Corp. (JFC) is looking to raise $600 million with bonds, as it braces itself from the impact of the coronavirus disease 2019 (COVID-19) pandemic.
The fast food chain operator told the exchange Friday it has priced in a $300-million 5.5-year and a $300-million 10-year dual tranche guaranteed senior notes, which will be issued by its wholly-owned subsidiary Jollibee Worldwide Pte. Ltd.
The 5.5-year notes will have a coupon rate of 4.125%, while the 10-year notes will have a coupon rate of 4.750%. Both are payable semi-annually. They will be unrated and listed on the Singapore Exchange Securities Trading Ltd.
JFC said proceeds from the offering will be used for general corporate purposes, “intended as a precautionary measure from unforeseen eventualities that may be caused by the COVID-19 pandemic.” It will also fund other initiatives from the JFC Group.
Earlier this week, JFC announced it had tapped banks to arrange the planned offering. Citigroup, Goldman Sachs, J.P. Morgan, and Morgan Stanley were joint global coordinators, and Citigroup, Goldman Sachs, J.P. Morgan, Morgan Stanley, BPI Capital Corporation, Credit Suisse and UBS were joint lead managers and joint bookrunners.
JFC posted a net loss of P1.8 billion in the first quarter, a turnaround from its net profit of P1.46 billion the same period last year, due to temporary store closures as the country implemented lockdown measures to curb the spread of COVID-19.
As the lockdown that started in mid-March dragged on through May, losses in the second quarter are expected to be bigger. JFC earlier said financial performance for the whole year “will not be a good one.”
Despite the challenges, JFC said it has sufficient cash of P26.5 billion or $522.3 million as of end-March and enough liquidity to support operations and meet all obligations.
The company has so far reduced its capital expenditures by 63% to P5.2 billion this year. It has also set aside P7 billion for rationalization and re-design of its business structure.
JFC owns 5,945 stores across the world under brands such as Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal, Burger King, PHO24, Yonghe King, Hong Zhuang Yuan, Dunkin’ Donuts, Highlands Coffee, Hard Rock Cafe, Smashburger and Coffee Bean and Tea Leaf.
Shares in JFC at the stock exchange increased 10 centavos or 0.07% to close at P150 each on Friday.