Jollibee eyes Vietnam IPO by July 2019
JOLLIBEE Foods Corp. (JFC) is bringing its joint venture behind the Highlands Coffee and Pho 24 brands to Vietnam’s stock market with an initial public offering (IPO) planned for 2019.
In a statement, the homegrown fastfood giant announced its subsidiary JSF Investments Pte. Ltd. agreed with partner Viet Thai International Joint Stock Co. ( VTI) on Monday to make SuperFoods Group a public company.
The joint venture will launch an IPO by July 2019 to facilitate its listing and trading on Vietnam’s equities market.
“Our planned IPO will raise capital to enable us to expand these two brands broadly in Vietnam, in other parts of Asia and in other key cities in the world,” SuperFoods Chief Executive Officer and Highlands Coffee Founder Thai Phi Diep said in the statement.
JSF and VTI will determine the size and price of the offering based on the capital required to “significantly” expand the business along with its fair value.
To date, SuperFoods has 159 stores under Highlands Coffee, 33 under Pho 24 and three under Hard Rock Café.
Booking $55 million in annual sales, the joint venture is among the fastest-growing businesses of JFC under a partnership.
The Jollibee Group acquired a 50% effective ownership in SuperFoods in 2012, following investments made through Jollibee Worldwide Private Limited amounting to $25 million. In October 2015, JSF infused around $700,000 more to the business.
Pursuant to the agreement to list SuperFoods, the joint venture’s ownership will be adjusted
with JFC, through JSF, owning 60% and VTI the remaining 40%, and certain financing structures will change.
As a result of the transaction, JFC will include SuperFoods in its financial consolidation.
The Philippines- listed company will extend a $ 30- million loan to VTI as well.
“As of now, there are no specific details yet as to which Vietnamese stock exchange,” JFC Senior Media Manager Renel Cecilio- Guerrero said in a text message, noting that SuperFoods will become the first joint venture of JFC to list abroad.
“Our fastest-growing business in terms of country is Vietnam and this reflects the vibrancy and potential of the economy and the strong performance of our joint venture business,” JFC Chairman Tony Tan Caktiong said in the statement.
Vietnam is projected to record among the fastest growth in Southeast Asia, rivalling that of the Philippines, amid dim prospects for the global economy that has been reeling from scrimped demand and rising protectionism.
The Asian Development Bank ( ADB), for instance, projected Vietnam’s economic expansion in the September update to its Asian Development Outlook 2016 at 6% for this year and 6.3% in 2017. The ADB had previously thought Vietnam’s gross domestic product would increase at faster paces of 6.7% and 6.5% this year and the next. It later revised the forecasts downward, as tepid demand from China weighed on merchandise exports. The regional lender, however, noted that Vietnam has started to recover on “brisk” exports of phones and other electronics and that it was positioned to benefit from China’s rebalancing to an economy that is consumption-driven from one that is fueled by exports.
In its World Economic Outlook, the International Monetary Fund also expected Vietnam’s growth to decelerate to 6.1% this year from the 6.7% recorded in 2015 partly on weaker external demand. The projections track the global economy’s likely slowdown to 3.1% before recovering to 3.4% in 2017.
The World Bank provided similar projections for Vietnam. In its Global Economic Prospects released in June, the multinational lender expected that economy to expand at 6.2% this year, down from 6.6% projected previously, and 6.3% for the next two years.
Still, Vietnam is expected to continue outperforming many peers in Southeast Asia, particularly Indonesia, Thailand and Malaysia.
It is expected to trail only the Philippines, which is projected by the ADB, IMF and World Bank to grow 6.4% this year.