JFC: Share sale gains to fund PH BIZ, not Compose Coffee

Homegrown fast-food giant Jollibee Foods Corp. (JFC) will use the funds raised from a planned preferred shares issuance to support growth in the Philippines instead of funding its recent acquisition of a South Korea-based coffee brand.

JFC chief financial officer Richard Shin told reporters last week the P8-billion issuance scheduled for later this year was for “investment in the Philippines.”

“Our growth in the Philippines is faster than our planned growth … It’s a good surprise, and it’s a good problem to have,” Shin said during a press conference.

The company led by tycoon Tony Tan Caktiong first announced the preferred share offering in March. JFC will offer an initial 5 million shares at P1,000 each. An additional 3 million shares would be allocated in case of strong demand.

Holders of preferred shares are prioritized during dividend payments. But unlike those with common shares, they have no voting rights over matters affecting the company.

For Compose Coffee, the CFO explained they had already identified banks they planned to work with to raise $111 million for their 43-percent shareholding in the coffee brand endorsed by BTS’ V. The remaining 57 percent, or $128 million, will be funded through cash.

JFC is set to acquire 70 percent of the South Korean coffee chain via Jollibee Worldwide Pte. Ltd. in a $340-million deal with Elevation Equity Partners Korea Ltd. and Titan Dining II LP.

The deal represents one of JFC’s most expensive acquisitions to date after The Coffee Bean and Tea Leaf, which it acquired in 2019 for $350 million, reflecting the Chickenjoy maker’s increasing confidence in the coffee segment.

Shin had said they would prioritize Compose Coffee’s growth in South Korea before bringing it to the Philippines in an attempt to chip away at Starbucks’ dominance. Starbucks Coffee has a 28-percent market share in South Korea against Compose Coffee’s 8 percent. INQ