Jollibee raises stake in Tim Ho Wan holding firm
GLOBAL fast food chain operator Jollibee Foods Corp. (JFC) is investing S$36.3 million (about P1.3 billion) to increase its stake in the holding entity and private equity fund behind restaurant brand Tim Ho Wan.
In a disclosure to the stock exchange on Tuesday, JFC said its wholly owned subsidiary Jollibee Worldwide Pte. Ltd. is buying the 25% interest of Aragon Investments SPC in Titan Dining LP, the holding entity of Tim Ho Wan.
The transaction is set to be completed by the end of the month, and will increase Jollibee Worldwide’s stake in the Titan fund to 85% from 60% at present.
Jollibee Worldwide’s investment in the Titan fund allows it to buy a substantial ownership in Tim Ho Wan’s master franchise in the Asia-Pacific region in seven years.
This is part of the company’s S$45-million (about P1.6-billion) investment in the Titan fund in 2018, which represents 45% of the fund’s S$100-million size at the time. The deal allows JFC to acquire the Tim Ho Wan franchise in region when the term ends in seven years.
As preparation, JFC has to operate as a franchisee of Tim Ho Wan in Shanghai, China. At the time of the transaction, the Tim Ho Wan brand was owned and operated by Tim Ho Wan Pte. Ltd. and its affiliate Dim Sum Pte. Ltd. It has 40 outlets across Singapore, Cambodia, Indonesia, Japan, Macau, Taiwan, Thailand, Vietnam, Australia, and the Philippines.
In 2019, Jollibee Worldwide increased its investment in the Titan fund to S$120 million (about P4.3 billion) after the fund size grew to S$200 million. This expanded the company’s investment in the fund to 60% from 45%.
“The increase in fund size and additional capital commitment of (Jollibee Worldwide) are in furtherance of certain strategic projects currently being undertaken by Titan, consistent with its mandate to invest in the food service sector and grow strong Asia Pacific food service brands,” JFC said.
Last year, JFC formed a $13-million joint venture with Dim Sum Pte. Ltd. through its wholly owned subsidiary Golden Plate Pte. Ltd. to bring the Tim Ho Wan brand in China. Golden Plate infused $7.8 million to own 60% of the joint venture, leaving 40% to Dim Sum Pte. Ltd.
JFC eventually opened its first Tim Ho Wan restaurant in Shanghai, China last September, boosting its portfolio of overseas brands it directly operates.
The company currently has 5,813 stores in its global network, 3,247 of which are located in the Philippines. The rest are spread across China, Vietnam, Brunei, Hong Kong, Singapore, Macau, Malaysia, United States, Canada, Saudi Arabia, United Arab Emirates, Qatar, Kuwait, Bahrain, Oman, Italy, United Kingdom, Guam, and Indonesia.
Aside from Tim Ho Wan, JFC controls Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal, Burger King, PHO24, Yonghe King, Hong Zhuang Yuan, Dunkin’ Donuts, Highlands Coffee, Hard Rock Cafe, Smashburger, and The Coffee Bean & Tea Leaf.
JFC has allocated P5.2 billion for capital spending this year. It swung to an attributable net loss of P12.99 billion in the first half of 2020, a turnaround of last year’s P2.18 billion income, due to store closures because of the coronavirus pandemic.
Shares in JFC at the stock exchange rose P14.40 or 9.31% to close at P169 apiece on Tuesday. — Denise A. Valdez