Jollibee Foods Corp. said it has obtained regulatory approval from the Philippine Stock Exchange (PSE) to “amend its foreign ownership limit from 40 percent to ‘no limit’.”
This means Jollibee, a publicly traded company, can become 100 percent foreign owned, it said in a disclosure to the PSE.
The largest fast-food restaurant in the Philippines amended its articles of incorporation to remove the provision about its ability to “own, acquire, mortgage, pledge or encumber land and/or any interest therein.”
Reacting to the news, Juan Paolo Colet, Chinabank Capital Corp. managing director, said. “The removal of the ownership restriction paves the way for Jollibee to attract more foreign equity participation in the company. This aligns with Jollibee’s ambition to be a leading player in the global restaurant industry.”
Colet added: “Having no nationality cap gives them a lot of headroom in case they need to get sizeable foreign equity capital for their expansion.”
In May last year, Jollibee announced its plan to amend its articles of incorporation, which scraps the company’s primary purpose of directly owning real properties but retaining the ability to invest in companies that own real properties, including land, “within the limitations prescribed by applicable laws and the Constitution.”
Section 7, Article XII of the 1987 Constitution provides that private lands shall only be transferred to individuals, corporations, or associations qualified to acquire or hold lands of public domain.
A much older law, the Commonwealth Act 141 of 1939 or the Public Land Act, meanwhile, prohibits foreign individuals from owning land unless through an entity that has at least 60 percent of its capital stock owned by Filipinos.
Jeri Alfonso, analyst at stockbroker Unicapital Securities Corp., said the development will be a “good catalyst” for the company given the removal of the restriction.
“This could provide some positive boost for the business,” which Alfonso noted, has one of the highest PE (price to earnings) ratio.
“But we think the premium is justified since it also has the highest EPS (earnings per share) growth in the consumer universe,” she said.
Jollibee shares gained P25.40 on Thursday’ trade to close at P262.40, up by 10.72 percent.
