Jollibee raises investment in Tim Ho Wan holding firm

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JOLLIBEE FOODS Corp.’s (JFC) wholly-owned unit, Jollibee Worldwide Pte. Ltd. (JWPL) is increasing its commitment to Titan Dining LP, the private equity fund owning the Tim Ho Wan brand and company-owned stores.

Through amendments to their JWPL and Titan Dining’s limited partnership agreement, Titan Dining’s fund size will be increased to SGD250 million from SGD200 million currently “to fund working capital requirements of Tim Ho Wan as well as facilitate the completion of other projects,” JFC said in a disclosure to the Philippine Stock Exchange on Tuesday.

Of this increased fund size, JWPL will chip in 90% or SGD225 million, which will allow additional investors to take the 10% participating interest. JWPL previously had full ownership of Titan Dining.

The company said it plans to “aggressively expand” Tim Ho Wan stores in China, where it currently operates three Tim Ho Wan outlets in Shanghai.

“JFC plans to aggressively expand Tim Ho Wan in Mainland China with a target of reaching 100 restaurant outlets within the next four years,” it said.

Tim Ho Wan has a total of 53 outlets in Asia, the majority of which are franchised stores. Singapore has 12 Tim Ho Wan outlets, followed by Taiwan with 12, the Philippines has seven branches, and Hong Kong has six.

“JFC aims to build as an important part of its portfolio a significant business serving Chinese cuisine in different parts of the world,” the company added.

Jollibee currently operates five brands serving Chinese cuisine, namely: Chowking with 608 stores across the globe, but most are located in the Philippines; Taiwanese food-inspired restaurant chain in China called Yonghe King with 373 stores; Beijing-based full-service restaurant chain Hong Zhuang Yuan with 39 stores; three Panda Express stores in the Philippines; and three Tim Ho Wan stores in China.

The listed fastfood giant has a network of 5,853 stores with 17 brands across 34 countries.

JFC, through JWPL, first invested in Titan Dining in May 2018 with SGD45 million to own a 45% participating interest in the fund, which was the master franchisee of Tim Ho Wan in the Asia Pacific region. The listed fastfood giant had said it would have the opportunity to acquire the restaurant chain’s master franchise through a purchase mechanism provided in the investment agreement.

JWPL then increased its capital commitment to Titan Dining to SGD120 million in October 2019, bringing its participating interest to 60%. Titan Dining’s fund size was doubled to SGD200 million from SGD100 million, and it also acquired the branding and trademarks of Tim Ho Wan.

In October 2020, JWPL further increased its stake in Titan Dining to 85% after it bought out another investor holding 25% in the fund for SGD36.3 million. In August 2021, it purchased the remaining 15% of other investors in Titan Dining for SGD71.56 million.

JFC shares declined by 2.64% or P6.20 to close at P229 each on Tuesday. — KCGV