Jollibee’s Hong Kong Spinoff Leaves a ₱93 Billion Debt Question

The restaurant group wants investors to value its international ambitions separately. Before celebrating, shareholders need to know which company will inherit the acquisition debt.

Jollibee Foods Corp. is preparing to serve investors two separately listed companies: a Philippine restaurant business traded in Manila and an international food-and-beverage group proposed for listing in Hong Kong.

The separation promises a cleaner view of two increasingly different businesses. The Philippine operation is Jollibee’s established cash generator. The international portfolio is the growth platform assembled through years of expansion and acquisitions, including The Coffee Bean & Tea Leaf, Smashburger, Highlands Coffee, Tim Ho Wan, Compose Coffee and, most recently, South Korea’s Shabu All Day operator.

But the most important number for existing shareholders isn’t the valuation Hong Kong investors might assign to that collection of brands. It is the amount of debt that will remain behind in the Philippine-listed JFC.

As of June 30, Jollibee carried approximately ₱93.17 billion of interest-bearing borrowings, excluding leases. These consisted of about ₱16 billion in short-term debt, ₱40.56 billion in long-term loans, and ₱36.61 billion in senior debt securities. Including roughly ₱52.79 billion of lease liabilities, its debt-like obligations approached ₱146 billion, according to the company’s second-quarter report.

Jollibee hasn’t disclosed how those obligations will be divided.

That omission is material. A spinoff can unlock value when assets, earnings, and the debt used to acquire them travel together. It can also transfer value from one class of shareholders to another when the growth assets are separated, but their financing remains with the former parent.

Two Companies, One Unanswered Balance Sheet

Jollibee said on Sept. 1 that it is considering a separate listing of Jollibee Foods Corporation International, or JFCI, on the Main Board of the Hong Kong Stock Exchange. JFCI is intended to hold the group’s current international business and operate with its own corporate, governance, financial, and organizational capabilities. JFC would remain listed in Manila and comprise the Philippine operations and businesses.

Existing JFC shareholders are expected to receive JFCI shares corresponding to their prevailing interests in JFC as of a future record date. The transaction remains subject to restructuring, due diligence, market conditions, and regulatory approvals. Jollibee hasn’t announced a listing date, valuation, distribution ratio, offering size, or final ownership structure.

Nor has it published the pro forma balance sheets that would show how much cash and debt each company will carry on its first day as an independent business.

That is the disclosure shareholders need most.

Jollibee presents Hong Kong as a natural market for the international group because of its presence and recognition across Asia. The exchange also gives JFCI access to regional and global investors familiar with Asian consumer and restaurant companies, while supporting its ambitions in markets including North America.

The logic is understandable. Investors could value the mature Philippine franchise separately from an international portfolio offering faster expansion but carrying greater execution risk.

Yet value discovery works only if each company’s capital structure reflects the business it owns.

Borrowing to Build an International Portfolio

Jollibee’s overseas expansion wasn’t assembled solely from retained earnings. The group has repeatedly used foreign-currency borrowing, securities issued through its Singapore financing subsidiary and bank facilities obtained by overseas units.

Its June balance sheet included ₱36.61 billion of foreign senior debt securities issued through Jollibee Worldwide Pte. Ltd., or JWPL. The outstanding balance largely represented two U.S.-dollar notes of roughly $300 million each. One originated from the group’s 2020 note program, whose proceeds were authorized for general corporate purposes and Jollibee group initiatives. A second $300 million note issued in April 2025 was designated for general corporate purposes and refinancing JWPL’s existing borrowings.

Those descriptions are broad. “General corporate purposes” doesn’t establish a one-to-one connection between a particular bond and a particular restaurant acquisition. But the instruments sit inside the international financing structure that helped Jollibee pursue its overseas strategy and refinance obligations accumulated along the way.

The connection is clearer in the company’s 2026 borrowing activity.

In January, JWPL obtained three unsecured $100 million term loans from banks in Singapore, producing a total carrying value of approximately ₱18.34 billion by June 30. The three-year facilities mature in January 2029 and carry floating rates based on three-month SOFR plus spreads of roughly 1% to 1.08%.

Jollibee said its first-half long-term borrowings largely consisted of bank loans obtained to fund both the redemption of senior debt securities and acquisition financing for its recent acquisition. During the same period, JWPL redeemed a $300 million senior note, while Jollibee completed the acquisition of All Day Fresh Co., the South Korean operator and franchisor of Shabu All Day.

The company hasn’t divided the $300 million loan package between the note redemption and the Korean transaction. Cash is fungible, and Jollibee manages funding across a consolidated group. It would therefore be too strong to label the entire ₱18.34 billion as acquisition debt.

Still, the disclosure confirms that acquisition financing was one of its purposes.

Jollibee’s international acquisitions over the past decade include its controlling investment in The Coffee Bean & Tea Leaf, the expansion of its Smashburger ownership, investments in Highlands Coffee’s parent, Milksha, Compose Coffee and Tim Ho Wan, among others. Its financial statements say the group uses operating cash flow to finance acquisitions and capital expenditures, which can limit the cash available for dividends.

The complete borrowing history is a mixture of acquisition funding, refinancing, capital expenditure, working capital, and general corporate finance. It isn’t possible from the current disclosures to prove that most of the ₱93.17 billion outstanding was directly drawn to buy foreign companies. It is fair, however, to say that a substantial part of Jollibee’s financial leverage arose within, or supported, the international expansion and acquisition program.

That distinction should be settled by the spinoff documents, not left to inference.

The Risk of Leaving the Debt in Manila

Suppose JFCI receives the overseas restaurant brands, their future earnings, and the ability to raise capital in Hong Kong, while Philippine JFC retains a disproportionate amount of the debt accumulated to build that portfolio.

The Philippine company would then be servicing acquisition-related obligations without retaining all the earnings and appreciation of the acquired assets.

Interest payments could consume cash that otherwise might be used for:

• Philippine store development;

• Dividends and share repurchases;

• Modernization of manufacturing and distribution;

• Debt reduction;

• Domestic acquisitions; or

• Protection against commodity inflation and weaker consumer demand.

Jollibee recognized approximately ₱977 million of interest expense on long-term debt during the first six months of 2026. Interest expense on senior debt securities, including amortization of issuance costs, was about ₱920 million. Those two categories alone generated roughly ₱1.90 billion of first-half financing expense, before short-term borrowing and lease interest.

If significant international acquisition debt remains with Philippine JFC, that expense could become a continuing claim on domestic cash flow.

There is also an exchange-rate issue. A Philippine-focused company saddled with U.S.-dollar debt could earn predominantly pesos while servicing obligations in dollars. A weaker peso would raise the local-currency value of principal and interest without a corresponding increase in foreign operating income.

International JFCI, by comparison, would own businesses generating currencies such as U.S. dollars, Singapore dollars, Vietnamese dong, Chinese yuan, Korean won and Malaysian ringgit. Although those cash flows wouldn’t perfectly match the group’s dollar debt, JFCI would have a more natural foreign-currency earnings base against which to carry internationally incurred obligations.

Debt Should Follow the Assets

The cleanest separation would generally place international debt with the international assets it financed, subject to lender consent, tax consequences, and the legal terms of guarantees.

That could mean transferring or refinancing some combination of:

• JWPL’s ₱36.61 billion of senior dollar notes;

• The ₱18.34 billion of January 2026 JWPL bank loans;

• Borrowings of international operating subsidiaries;

• Overseas lease liabilities; and

• Other acquisition-related or intercompany obligations.

Not all foreign-currency debt necessarily belongs in JFCI. Some proceeds may have supported the consolidated group, and some liabilities may be difficult or expensive to transfer. Existing notes and loans may carry guarantees, covenants or change-of-control provisions requiring lender approval.

But if debt remains with Philippine JFC, shareholders should be shown what assets, cash, receivables or continuing economic rights the Philippine company receives in exchange.

The separation shouldn’t amount to moving the restaurants to Hong Kong while leaving the mortgage in Manila.

The Disclosure Shareholders Need

Before shareholders can evaluate the transaction, Jollibee should publish pro forma financial information showing:

1. The exact assets and subsidiaries transferred to JFCI;

2. Debt allocated to Philippine JFC and JFCI;

3. Cash allocated to each company;

4. Which entity will service and guarantee the senior foreign notes;

5. Treatment of the January 2026 acquisition-related bank loans;

6. Standalone interest expense and maturity schedules;

7. Net debt-to-EBITDA and interest coverage for both companies;

8. Intercompany loans and transitional financial support;

9. Expected dividends from JFCI to Philippine shareholders; and

10. How IPO proceeds, if any, will be used.

The planned Hong Kong listing may ultimately expose value that investors have struggled to identify inside the consolidated group. JFCI could gain an acquisition currency, independent access to capital and a shareholder base more accustomed to valuing regional restaurant platforms. Hong Kong’s active market for new listings could help that process.

But a higher valuation for JFCI won’t automatically produce a better outcome for Philippine JFC shareholders. Their economic result will depend on what they receive in JFCI, what assets remain in Manila and, most critically, where the debt lands.

For now, Jollibee has told investors where it wants to list its international growth story.

It hasn’t yet told them who will be left with the bill.

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Disclaimer: This is for informational purposes and is not investment advice. Figures come from company disclosures and exchange data; valuation ratios reflect the author’s calculations based on cited inputs.