Jollibee to borrow $100M for investment in China

MANILA, Philippines - HOMEGROWN fastfood giant Jollibee Foods Corp. plans to borrow $100 million from several banks to fund its investments in China. It will be the first domestic borrowing by the Jollibee group in seven years. In a disclosure Monday, the company said it would get the money from Metropolitan Bank and Trust Co., Banco de Oro Unibank, Inc., Rizal Commercial Banking Corp. and the Manila branch of Bank of Tokyo-Mitsubishi UFJ, Ltd. The group, which is aggressively expanding overseas while continuing to outsell McDonald’s and KFC here, operates two fastfood brands in China — Yonghe King and tea house Chun Shui Tang. Jollibee said the loan would be denominated in the Chinese currency and will amount to 700 million yuan or about $100 million, to be paid in three years. The company said Metrobank would be the facility agent, while the Singapore branch of UBS AG would be the swap bank. The facility has been arranged by the Hong Kong branch of UBS AG. "The [loan] will enable Jollibee to pursue its profitable expansion in one of the largest and fastest-growing consumer markets in the world," said Tony Tan Caktiong, Jollibee chairman and chief executive officer. Mr. Tan Caktiong said the company would use the money this year and next year to expand the store network of Yonghe King and other branches. It will also invest in commissary and product development facilities of the Jollibee group and acquire the Hongzhuangyuan chain of restaurants in Beijing. In the Philippines, Jollibee operates its flagship hamburger and chicken chain with the same name, pasta and pizza store Greenwich, Chinese fastfood chain Chowking, the Red Ribbon bakery, and Delifrance. As of July, the group had 1,472 stores locally and 219 stores spread across Hong Kong, China, Vietnam, Dubai, Indonesia and the United States. In June, Jollibee signed a joint- venture deal to acquire 70% of the Lao Dong restaurant chain in Taipei for $1.3 million and has invested another $700,000 to expand the business in Taiwan and in China. Jollibee has also bought the Hongzhungyuan restaurant chain, which operates 37 stores mostly in Beijing, for $55.5 million. Jollibee shares closed unchanged at P43.5. — Kristine Jane R. Liu, BusinessWorld