JOLLIBEE Foods Corp. said it is shelving plans to raise funds through the sale of preferred shares worth P8 billion.
The company said it will instead cut capital spending this year, for which part of the share sale is supposed to be used.
The fundraising was also set to be used to finance the redemption of its preferred shares, Series A, due in October this year.
The company told regulators that the share sale “would no longer be needed for the refinancing of the Series A preferred shares due primarily to the strong profit performance and cash flow generation of its Philippine business.”
“Following careful consideration of all relevant factors and in the interest of achieving the best value for our shareholders, we have made the decision to withdraw our previously announced public offering of Series C Preferred Shares. We will explore other capital raising opportunities, focused on shareholder value and optimization of our capital structure,” said Richard Shin, Jollibee chief financial officer.
On its capital spending that was earlier announced to reach P23 billion, Jollibee noted plans to cut the budget by 20 percent.
Shin last week said the proceeds of the share sale will finance 47 percent of the company’s capital expenditure for its Philippine businesses.
Jollibee also said the rate cuts expected to occur later in the year would allow it to obtain more beneficial bank loans at floating interest rates. It also noted the profit-accretive contribution from the consolidation of Compose Coffee.
“Jollibee expects these factors and considerations will improve its flexibility in its funding and in increasing its leverage position,” the company added.
