Jollibee unloads stake in Jinja Bar owner

JOLLIBEE Foods Corp. (JFC) is unloading another business to focus on larger operations in the United States.

In a statement issued on Thursday, the fast-food giant said its subsidiary Jollibee Worldwide Pte. Ltd. (JWPL) will divest its 80.55% stake in Chow Fun Holdings LLC, the owner of the Jinja Bar and Bistro restaurant concept in the US.

JWPL will receive $1.6 million in readily available funds from Chow Fun for the redemption of 2,900 Class A membership units. JFC initially acquired a 12% stake in Chow Fun in July 2008 before expanding its shareholding to 80.55% in March 2011.

“JFC’s divestment of its shareholdings in Chow Fun is part of its intention to concentrate its resources in building its larger businesses,” the statement read.

The company is operating 34 stores under the flagship brand Jollibee, 33 under Red Ribbon and 16 under Chowking in the US. It also maintains a 40% ownership in Smashburger Master LLC, which operates 378 stores mostly located in the US.

JFC, through Bee Good!, Inc, agreed to acquire 40 Class A membership units in Smashburger for around $99 million in October 2015. The deal provided for a mechanism for the subsidiary to purchase an additional 35% stake from 2018 to 2021 and the remainder from 2019 to 2026.

The company announced its divestment from Chow Fun two days after disclosing a decision to pass its 55% stake in Guangxi San Pin Wang Food and Beverage Management Co. Ltd. onto partner Guangxi Zong Kai Food Beverage Investment Co. Ltd. for 90 million yuan.

The divestment will supposedly allow JFC to focus its resources on bigger businesses in China, particularly Yonghe King whose operation spans 315 stores.

JFC operates the largest food service network in the Philippines. At end-October, it had 2,565 restaurant outlets under the brands Jollibee, Chowking, Greenwich, Red Ribbon, Mang lnasal and Burger King. Abroad, it operated restaurants under the brands Yonghe King, Hong Zhuang Yuan, San Pin Wang, Dunkin’ Donuts, Jollibee, Red Ribbon, and Chowking.

In addition, JFC maintains interest in joint ventures operating 594 stores worldwide. Aside from Smashburger, it holds a 50% interest in Highlands Coffee and Pho 24, among others, and 48% in 12 Hotpot.

In the nine months to September, the company realized a 13.8% increase in net income attributable to its equity holders to P4.39 billion.

Shares in JFC closed P4 or 1.90% lower at P206 apiece on the Philippine Stock Exchange on Thursday. —