Partial Payment For Acquisition
Jollibee Foods Corporation (JFC) said that it has plans to use the dollar bond market so it could issue senior perpetual securities. The proceeds from this issuance will then be used to pay for a portion of the acquisition of Coffee Bean & Tea Leaf (CBTL). JFC said on PSE that its subsidiary Jollibee Worldwide Pte. Ltd. (JWPL) has tapped banks to manage and organize the issuance of bonds. Citigroup Global Markets Singapore Pte. Ltd. and J.P Morgan (S.E.A) Ltd. will be the joint global coordinators while the joint lead managers and joint bookrunners are Citigroup, Credit Suisse, Mizuho Securities, and J.P Morgan.
Catch me in my live training events! (quick plug)
The heart of why I do these seminars is I want to build a generation of Filipinos with the right foundation in stock investing. I want to bring smart investing to every Filipino around the world! If you would like to know more about how you could time the market check out the training below.
Stock Smarts Taiwan – February 15, 2020
Stock Smarts Manila: March 14, 15, 21, 22 & 28, 2020
Stock Smarts Singapore: May 16 – 17, 2020
Stock Smarts New Zealand: June 6 – 7, 2020
Stock Smarts London: April 18 – 19, 2020
Stock Smarts Sydney: April 11 – 12, 2020
Organization Of Bonds Issuance
JFC also disclosed that the banks identified will be in charge of arranging a series of fixed income investor meetings in London, Singapore, and Hong Kong. The meeting will start on January 13. The company is targeting a Regulation S offering. This means that the dollar-denominated senior perpetual capital securities will be executed outside the United States. Equity and debt securities can be utilized to accumulate capital for JFC. So, how does the company plan to use the funds?
Use of Proceeds
The proceeds will initially go to refinancing the short-term debt from the acquisition of International Coffee and Tea, LLC or the CBTL, which was completed on September 24, 2019. It will also go to the fund initiatives aligned with the JWPL’s general corporate purposes. JFC added that the securities will be attributed to as equity securities to strengthen the balance sheet of JFC while complying with the policy of prudent financial management. The amount to be raised has not been disclosed as of this moment. Soon after finalizing everything related to this issuance, we will know further about the capital to be reserved.
Debt-Free Basis Acquisition
JFC acquired CBTL on a debt-free basis. This means that upon purchase, CBTL will have no debt. JFC utilized Java Ventures, LLC as its acquiring entity. Java Ventures is known to be a US-based unit of Singapore-based Super Magnificent Coffee Co. Pte. Ltd.—a subsidiary of Jollibee Worldwide Pte. Ltd. (JWPL). JWPL also entered into bridge loans to pay for the acquisition through different financial institutions. To date, CBTL is the largest acquisition of the firm with branches in 27 countries. Last August 31, the famous coffee shop has 1,180 outlets, 336 of them are company-owned and 844 are franchised. It generated a net loss of $21.38 million in 2018 following its revenues of $313 million.
