Jollibee Foods Corp. is looking to tap dollar-denominated securities overseas to refinance the borrowings used to fund the acquisition of The Coffee Bean and Tea Leaf.
Jollibee said unit Jollibee Worldwide Pte. Ltd., (JWPL) tapped Citigroup Global Markets Singapore Pte. Ltd., (Citigroup) and JP Morgan (S.E.A.) Limited (JP Morgan) as joint global coordinators, and Citigroup, Credit Suisse, JP Morgan and Mizuho Securities as joint lead managers and bookrunners “to arrange a series of fixed income investor meetings in Hong Kong, Singapore, and London commencing on Jan. 13, 2020.”
“A Reg S only US dollar-denominated guaranteed senior perpetual capital securities offering may follow subject to market conditions,” it added.
Jollibee said the securities “will be accounted for as equity,” and will strengthen the balance sheet of the company, in line with its policy of prudent financial management.
Jollibee in June announced it was acquiring CBTL but only completed the purchase in September, for $350 million.
Jollibee earlier said it will initially finance the entire acquisition through a bridge loan through unit JWPL, which will put up a separate holding company in Singapore to house CBTL. The directly-acquiring unit of Jollibee — Java Ventures, LLC (United States) — will be folded into the soon-to-be incorporated holding company. The company will then be listed with an exchange in three to five years time.
CBTL is being acquired on a debt-free basis.
Jollibee said it is sinking $100 million in the new holding company, representing 80 percent of the equity of the holding company, and another $250 million will be extended as advances that the latter will cover with preferred shares, issued in six to nine months. The remaining 20 percent equity in the Singapore holding company will then be covered by Jollibee’s partner in the Superfoods Group of business which owns and operates Highlands Coffee and Pho 24 — members of the family that owns Viet Thai International Joint Stock Company.
CBTL was then seen to add 14 percent to Jollibee’s global system wide sales, 26 percent to its total store network, and will bring international business’ contribution to 36 percent of worldwide sales.
Jollibee said it will also bring the company “closer to its vision to be one of the top five restaurant companies in the world in terms of market capitalization” and will allow Jollibee to become “an important player in the large, fast growing and profitable coffee business.”