RetailFortune 500

Yum Brands’ Chinese Business Files to Issue 10 Million Shares Amid Spinoff

By Reuters
By Michelle Toh
A KFC restaurant at a corner of street. KFC, McDonalds,
BEIJING, CHINA - 2014/07/22: A KFC restaurant at a corner of street. KFC, McDonalds, Pizza Hut and other Western brands are suffering a food safety crises in the Chinese market. On July 20, 2014, Shanghai Fuxi food Ltd. the meat supplier for well-known international fast food chains such as McDonalds and Yum Group, was exposed for using expired and bad chicken and beef. (Photo by Zhang Peng/LightRocket via Getty Images)
Zhang Peng/LightRocket via Getty Images

Yum China Holdings, which is being spun off from KFC owner Yum Brands (YUM), filed with regulators on Wednesday to issue 10 million common shares to certain participants in Yum incentive plans.

Yum Brands, which also owns Pizza Hut, said in October that it would spin off its China operations through a distribution of common shares to its shareholders.

See also: Yum Brands Is Selling a Stake in Its China Business for $460 Million

The 7,200-restaurant China division, which operates in over 1,100 cities, is higher risk and potentially more rewarding, while Yum Brands sans the China division is likely to be more stable with greater cash flow.

The China business has been besieged by food scandals, marketing missteps, and a weakening Chinese economy.

See also: McDonald’s Said to Get at Least 3 Final Bids for Its China Restaurant

Last year, Yum Brands was put under pressure by activist shareholder Keith Meister of hedge fund Corvex Management who was later appointed to the company’s board.

Yum China had applied to list its common stock on the New York Stock Exchange under the ticker symbol “YUMC”.