|Date : 23/05/2011
|Jollibee Foods Corporation (JFC), through wholly-owned Jollibee Worldwide Pte. Ltd. (JWPL), is investing $25 million to acquire a corporate vehicle for further expansion in Vietnam, Hong Kong, Macau and Southern China.
In a disclosure to the Philippine Stock Exchange, Jollibee, headed by Chairman-CEO Tony Tan Caktiong, said JWPL has signed a framework agreement with Viet Thai International Joint Stock Company and its related parties to establish a platform for owning and operating a portfolio of restaurants in various territories.
Under the agreement, JWPL will invest $25 million to acquire 49 percent of the joint venture’s company in Vietnam and 60 percent of its company in Hong Kong including the current restaurant businesses of the Viet Thai group.
The Viet Thai group will also receive a $35-million advance which will be repaid in 2016 with interest at the rate of five percent per annum or such other rate as may be agreed upon by the parties.
Part of the investment will be used to fund the joint venture’s acquisition of an additional restaurant chain. After completion of the acquisition, the joint venture will have a total of 139 outlets across its brands, including 118 in Vietnam and 21 in five other countries.
Viet Thai, which is based in Vietnam, has extensive experience in the food and beverage industry, as owner and operator in Vietnam of Highlands Coffee, Hard Rock Cafe, and several smaller food outlets. It also owns Hard Rock Cafe in Hong Kong.
Jollibee said Viet Thai’s consolidated restaurant business was profitable in 2010 with EBITDA at $1.7 million and total sales amounting to about $30.2 million, including the new acquisition.
The execution of definitive agreements will be subject to compliance with certain conditions, including the procurement of relevant government and third party approvals for the transaction.
Jollibee subsidiary Tokyo Teriyaki Corporation is also acquiring the assets of all 20 Chowking stores in the USA from the master licensee Fortune Food Service Company and its related companies for $16 million.
JFC recently borrowed a total of P3.9 billion from foreign banks to finance the group’s capital expenditures and acquisitions in the country and abroad.
The firm entered into an agreement to borrow P900 million from The Bank of Tokyo-Mitsubishi, UFC, Ltd. while JWPL entered into agreements to borrow money from Citibank N.A. and The Bank of Tokyo Mitsubishi UFC, Ltd. (Singapore branch) amounting to $40 million and $30 million, respectively.
Source: Manila Bulletin