Manila–(PHStocks)–Jollibee Foods Corporation (PSE: JFC), through its wholly owned subsidiary Jollibee Worldwide Pte Ltd (JWPL), completed today its acquisition of 50% share of the business of SuperFoods Group. This consists of a 49% share in SF Vung Tau Joint Stock Company, organized in Vietnam, and a 60% share in Blue Sky Holdings Ltd in Hong Kong. This acquisition is an implementation of the Framework Agreement made on May 20, 2011 between JFC and its partner, Viet Thai International Joint Stock Company (VTI). The Framework Agreement provided for JFC investing $25 million for 50% of the SuperFoods business and a $25 million loan to VTI. JFC had also advanced $5 million to the SuperFoods Group.
As previously disclosed on December 21, 2011, JFC, through its wholly owned subsidiary JSF Investments Pte Ltd, a subsidiary of JWPL in Singapore, formally initiated the process for owning 50% share of the business of the SuperFoods Group.
The SuperFoods Group owns and operates various brands, including Highlands Coffee Shops in Vietnam, Highlands Coffee Packaged Products and Hard Rock Cafe franchised stores in Macau, Hong Kong and Vietnam. Very recently, the SuperFoods Group also acquired the Pho 24 Brand and restaurants, which have presence in Vietnam, Indonesia, Philippines, Hong Kong, Cambodia, and Japan. The annual sales of the SuperFoods Group amount to about $30 million.
Highlands Coffee serves Vietnamese coffee and light meals in trendy coffee shops. It also sells packaged coffee through retail outlets. Pho 24 serves traditional Vietnamese dish with rice noodles as its core products.
JFC and its partner VTI, through their joint venture in the SuperFoods Group, aim to offer Asian mass consumers high quality coffee and cafe experience at affordable prices through the Highlands Coffee Shops and the Highlands Packaged Products. They also aim to serve the Asian mass consumers high quality Vietnamese food at affordable prices through the Pho 24 brand and restaurants.
JFC also plans to serve Highlands Coffee in the restaurants of its various brands in order to upgrade the quality of its coffee at prices its consumers can afford.
Currently, the Highlands Coffee Shops have 56 stores in Vietnam while Pho 24 has 48 restaurants in Vietnam, 11 in Indonesia, four in Hong Kong, three in Tokyo, one in Cambodia, and two in the Philippines.
In the Philippines, the franchising rights for offering Highlands Coffee Shops was granted to IP Ventures Inc. pursuant to an agreement made on December 20, 2011, between IP Ventures and Blue Sky Holdings Limited. IP Ventures, a company owned and controlled by the IPVG Corp. (PSE: IP), operates the largest chain of internet cafes in the Philippines with 116 outlets under the brand name Netopia.
JFC will use the equity method in accounting for its 50% interest in the SuperFoods joint venture in compliance with the Philippine Financial Reporting Standards (PFRS) and the International Financial Reporting Standards (IPFRS). Under this method, the revenues, other profit and loss items and cash flows generated and the balance sheet held by the SuperFoods Group will not be reflected in each line item of JFC’s Consolidated Financial Statements. Only JFC’s investments in, loans and advances to, and its 50% share in the net results of operations of SuperFoods Group (as Other Income – Equity in Net Earnings) will be reflected in its Consolidated Financial Statements.
The Jollibee Group of companies operates the largest restaurant network in the Philippines. As of December 31, 2011, it was operating a total of 2,003 stores in the country: Jollibee brand, 747; Chowking, 391; Greenwhich, 205; Red Ribbon, 208; Mang Inasal, 429; and Burger King, 23. Abroad, it was operating 468 stores: Yonghe King, 265; Hong Zhuang Yuan, 52; Jollibee, 78 (US: 27; Vietnam: 31; Brunei: 11; Jeddah: 7; Hong Kong and Qatar: 1 each); Red Ribbon in the US, 34; and Chowking, 39 (US: 19; Dubai: 16; Indonesia: 2; and Qatar: 2), for a total of 2, 471 stores worldwide.