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LBC Express revives follow-on offering

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LBC Express Holdings, Inc. has moved to jump-start anew a long-delayed plan to undertake a follow-on offering to fund its expansion program.

LBC said in a disclosure to the stock exchange on Thursday it approved the re-filing with the Securities and Exchange Commission (SEC) of the registration statement in relation to its proposed share sale.

The Araneta-led logistics firm did not indicate the maximum price for the equity offer, but retained the offer size of up to 69.101 million consisting of 10 million new common shares and 59.10 million secondary shares.

LBC may raise P1.04 billion from the share sale based on the closing price of P15 each on Thursday.

Abacus Capital and Investment Corp. replaced Philippine Commercial Capital, Inc. as the lead underwriter and issue manager for the follow-on offering.

“The company expects to use the net proceeds from the offering for general corporate purposes and working capital, including the expansion of retail and corporate business, information technology development, and other corporate purposes,” LBC said.

The follow-on offer is subject to the approvals of the SEC and the Philippine Stock Exchange, Inc.

LBC has been eyeing a follow-on share sale as early as 2015 when it joined the bourse by taking over dormant holding firm Federal Resources Investment Group, Inc.

Last April, the PSE rejected its application to tap the equities market due to the pending cases filed by the Philippine Depository Insurance Corp. (PDIC) against its owners.

The PSE thumbed down the fund-raising initiative “based on the suitability issue affecting the company, which arises from the ongoing civil case filed by the PDIC against LBC Express, LBC Development, LBC Properties, and certain members of the Araneta Family.”

In 2016, the PDIC filed before the Department of Justice complaints against the officials of shuttered LBC Development Bank, Inc. for estafa, and violation of the PDIC Charter or Republic Act No. 3591 by conducting business in an “unsafe and unsound manner” that caused the bank to lose at least P1.8 billion.

The PSE also cited the SEC’s earlier decision to junk the registration statement filed by LBC Express in relation to its follow-on offering.

However, LBC insisted then that the PDIC case should not affect its suitability to conduct the share sale.

LBC turned to a private equity firm for funding last year with the issuance of $50 million in secured convertible notes to CP Briks Pte. Ltd.

Last July, LBC filed a registration statement again to the SEC in line with a plan to raise as much as P1.5 billion from a share sale.

In the nine months ending September 2017, LBC grew its net income by nearly a fifth to P733.5 million from P620.5 million a year ago buoyed by the double-digit growth in service revenues.

LBC is banking on the growth of the country’s logistics sector especially with the rise of the e-commerce industry and small to medium enterprises. — Krista Angela M. Montealegre