By James A. Loyola
Logistics firm LBC Express Holdings, Inc. is planning to raise $50 million from the issuance of the LBC Convertible Instrument in lieu of a P1.2-billion follow-on offering which has hit regulatory roadblocks.
In a disclosure to the Philippine Stock Exchange (PSE), LBC Express said its Board of Directors has approved the planned issuance of convertible instruments in favor of CP Briks Pte. Ltd.
“The proceeds of the Convertible Instrument will be used to fund the growth of the business of the Company, including capital expenditures and working capital,” LBC Express said.
It added that, “the Convertible Instrument shall be convertible to shares of the Company, to be issued out of the unissued portion of the Company’s authorized capital stock.”
The LBC Board also approved the creation of a pledge over all of the Company’s shares in LBC Express, Inc. in favor of CP Briks Pte. Ltd., to secure its obligations under the Transaction, subject to the approval of the shareholders of the Company in a meeting called for this purpose.
Pending approval of the shareholders of the Company being secured, the obligations of the Company shall be secured by a third party pledge to be extended by LBC Development Corporation, the parent company, over 51 percent of the outstanding capital stock of the Company owned and held by LBC Development Corporation.
Immediately following the Board approval, LBC Express entered into an Omnibus Agreement relating to the above Transaction, wherein the Company agreed to issue, and CP Briks Pte. Ltd. agreed to purchase, the LBC Convertible Instrument, subject to the fulfillment of certain conditions precedent including the final approval of the investment committee of CP Briks Pte. Ltd.
The firm noted that, the LBC Convertible Instrument has not yet been issued by the Company or purchased by CP Briks Pte. Ltd.
Earlier this month, the Philippine Stock Exchange denied the request of LBC Express Holdings for reconsideration of the bourse’s earlier PSE decision to defer their review and processing of its Listing Applications.
LBC said it is seeking the listing of 10 million common shares for its follow-on offering; 1.2 billion shares issued to LBC Development Corporation pursuant to various private placement transactions; and 178.99 million shares issued to certain public investors.
“Per the PSE, their rejection of the Listing Applications is based on the suitability issue affecting the Company, which arises from the ongoing civil case filed by the Philippine Deposit Insurance Corporation against LBC Express, LBC Development, LBC Properties, and certain members of the Araneta Family,” LBC said.
The PSE also cited as a reason for the rejection of the Listing Applications the earlier rejection by the Securities and Exchange Commission of the registration statement filed by the company relating to its follow-on offering.
The PSE noted that given the SEC’s rejection of the Registration Statement, the Company will not be able to submit the SEC Order of Registration, which is an essential listing requirement.