Jollibee Foods Corporation (JFC), one of the largest food service companies in Asia, is planning to raise up to P8 billion from a domestic preferred share offering to refinance maturing obligations.

In a disclosure to the Philippine Stock Exchange (PSE), the firm said its Board of Directors has approved the plan to offer and issue to the public in the Philippines an additional five billion Preferred Shares with an oversubscription option of up to three billion Preferred Shares. 

The Preferred Shares will be sold at a subscription price of P1,000.00 per share, with an estimated issue size of P5.0 billion to up to P8.0 billion, if the oversubscription option is fully exercised. 

These will be cumulative, non-voting, nonparticipating, non-convertible, redeemable, Peso-denominated perpetual Preferred Shares.

This planned additional Preferred Shares issuance will be offered as the second tranche under the 20,000,000 Preferred Shares Shelf Registration approved by the Securities and Exchange Commission on September 24, 2021. 

The second tranche of the Preferred Shares will be listed on the PSE. The issuance and listing of the second tranche of the Preferred Shares is subject to the approval by the SEC and the PSE, respectively.

The first tranche of the Preferred Shares previously offered consisted of three billion Series A Preferred Shares with a dividend rate of 3.2821 percent p.a. and nine billion Series B Preferred Shares with a dividend rate of 4.2405 percent per annum. 

The dividend rate and other terms of the planned additional Preferred Shares will be determined at the time of pricing of the offering.

Jollibee said it is “undertaking this funding transaction to maintain strong capital structure, robust leverage position, and optimize liquidity by managing maturities of financial obligations.”

A portion of the net proceeds from the offering will be used to refinance obligations including JFC’s callable Series A Preferred Shares which is due in October 2024 and for other general business purposes.

The second tranche Preferred Shares will come from the reclassification of the existing authorized and unissued common shares of JFC, thus not expanding the total number of authorized shares in its equity base.

The Preferred Shares issuance will also not affect the current cash dividend policy (33 percent of net income attributable to common equity holders of the parent company) and its implementation.

The second tranche Preferred Shares offering will be jointly underwritten by BPI Capital Corporation, Chinabank Capital Corporation, and BDO Capital.