JOLLIBEE Foods Corp. is reviewing its plan to raise P8 billion through a preferred share sale, citing the improving business environment locally and the expected drop in interest rates.
“What we’ve seen recently, it’s a good surprise, and it’s a good problem to have, but our growth in the Philippines is faster than our planned growth. Which is to say, it’s a cash business, so we don’t know how much really we need in terms of preferred shares because our business is actually growing much faster. So, we’re going to reevaluate and we’re going to consider if we need to do the preferred, if we do it if we need the 5-million (shares) cap that’s been announced,” said Richard Shin, Jollibee chief finance officer.
Jollibee in March said it plans to issue an initial 5 million of its preferred shares – cumulative, non-voting, non-participating, non-convertible, redeemable and perpetual – at P1,000 apiece, with an option to upsize the offer by 5 million shares more.
Shin said the proceeds of the share sale will finance 47 percent of the firm’s capital expenditures for its Philippine businesses.
The company also said a portion will be used to refinance financial obligations including callable Series A preferred shares due in October 2024.
“We’re taking a look at this, again, understanding that the rates haven’t come down yet. And that’s important because to lock into a fixed rate, whether it’s a coupon or whether it’s interest, at the time of a potential rate cut, that’s probably not the right way. We’re looking at other instruments that’s more variable in order to take advantage of lower interest rates that we know are coming,” Shin said.
“Now the great thing is, we have options. And we have partners who have been with us for decades. So we have many banks and other institutions that are willing to finance us. So we’re looking at all the options at the moment,” Shin said.
