Jollibee secures approval to lift foreign ownership limit
In this article (4)
F&B giant Jollibee Foods Corporation (JFC) has received approval from the Philippine Stock Exchange (PSE) to remove its 40 percent foreign ownership limit.
The decision follows the company’s amendment request to its articles of incorporation, which also includes removing its ability to own, acquire, mortgage, pledge, or encumber land.
Article 12 of the Philippine Constitution restricts foreign ownership of land and certain businesses to 40 per cent, with the remaining 60 per cent reserved for Filipino citizens or corporations.
Following the change, JFC is now positioned to accommodate more foreign investors.
AP Securities research analyst Jose Cipres said the move allows the company to raise additional capital for expansion through a sale-leaseback transaction.
“They could use the proceeds from the sale of land to expand their current store portfolio, translating to higher earnings,” explained Cipres.
Meanwhile, Unicapital equity research analyst Jeri Alfonso said removing the foreign ownership limit is a good catalyst for JFC.
“Given this current market condition, this will provide a big boost to the company in terms of trading volume,” Alfonso added.
Questions & Answers
Q.What prompted Jollibee to request this change to its articles of incorporation?
What prompted Jollibee to request this change to its articles of incorporation?
Jollibee's request was part of an amendment to its articles of incorporation. This amendment also included removing its ability to own, acquire, mortgage, pledge, or encumber land.
Q.How will Jollibee use the capital raised from potential land sales?
How will Jollibee use the capital raised from potential land sales?
According to AP Securities analyst Jose Cipres, Jollibee could use the proceeds from selling land to expand its current store portfolio. This expansion is expected to lead to higher earnings for the company.
Q.How does removing the foreign ownership limit benefit Jollibee from a market perspective?
How does removing the foreign ownership limit benefit Jollibee from a market perspective?
Unicapital equity research analyst Jeri Alfonso stated that lifting the limit is a good catalyst for Jollibee. It is expected to provide a significant boost to the company's trading volume in the current market conditions.
Reader pulse
JFC's ownership change: Good for business?
19,456 votes so far