JOLLIBEE Foods Corp. (JFC) is planning to offer US unsecured securities to generate funds that will support it through the coronavirus disease 2019 (COVID-19) pandemic.
In a disclosure to the exchange Wednesday, the listed fast food operator said it had mandated several banks to arrange a series of fixed income investor calls starting June 17.
The banks are Citigroup, Goldman Sachs, J.P. Morgan and Morgan Stanley as joint global coordinators, and Citigroup, Goldman Sachs, J.P. Morgan, Morgan Stanley, BPI Capital Corp., Credit Suisse and UBS as joint lead managers and bookrunners.
“Proceeds from the contemplated 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, as well as fund initiatives of the group,” it said.
The offering will be done by JFC subsidiary Jollibee Worldwide Pte. Ltd. After the banks arrange the plan, the company will proceed with a Regulation S only, dollar-denominated guaranteed, senior unsecured securities offering subject to market conditions.
A Regulation S offer means the securities are executed in countries outside the United States. It can be used for the issuance of equity or debt securities to raise capital.
JFC noted while it is preparing for a larger impact of the pandemic, the group currently has P26.5 billion or $522.3 million cash as of end-March. This gives the company enough liquidity to support its existing operations and meet all obligations.
JFC reversed its income to a net loss of P1.8 billion in the first quarter, falling from a net profit of P1.46 billion the same period last year, due to temporary store closures triggered by the COVID-19 pandemic.
It warned losses in the second quarter may fall deeper due to a longer lockdown covered in April to June, thus financial performance for the whole year “will not be a good one.”
Part of the company’s initiatives to tide through the pandemic is cutting its 2020 budget for capital expenditures by 63% to P5.2 billion. It is also allocating P7 billion to “rationalize and re-design” its business structure to adapt to new consumer habits emerging from the pandemic.
JFC owns food brands such as Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal, Burger King, PHO24, Yonghe King, Hong Zhuang Yuan, Dunkin’ Donuts, Highlands Coffee, Hard Rock Café, Smashburger and Coffee Bean and Tea Leaf. It has 5,945 stores across the world, where 3,317 are in the Philippines.
Shares in JFC at the stock exchange gained P2.50 or 1.75% to P145 each on Wednesday. — Denise A. Valdez