To accommodate LBC’s backdoor listing
The board of directors of Federal Resources Investment Group Inc. is increasing its authorized capital stock to P2 billion from the current P100 million in a bid to accommodate the backdoor listing of Araneta-owned courier and freight forwarding services firm LBC Express Inc.
The increase in authorized capital stock to P2 billion is much lower than the P3 billion initially set during the company’s annual stockholders meeting earlier this month.
“During the special board meeting of the board of directors of the corporation held on September 18, 2015, the board of directors of the corporation resolved to set the amount of the increase in authorized capital stock to P2 billion divided into 2 billion shares with par value of P1 per share,” the company said in a disclosure to the Philippine Stock Exchange (PSE).
The move still requires the approval of the Securities and Exchange Commission.
The board also approved two Deeds of Subscription with holding firm LBC Development Corp., following the issue of Federal Resources’ shares to LBC to pave the way for its backdoor listing on the PSE.
The first involves the issue of 475 million common shares valued at P1 each out of the increase in the authorized capital stock, while the other will be an issue of 671.873 million common shares at P1 per share from the unissued authorized capital stock, which will be subscribed right after the SEC approves the hike in authorized capital.
At its last stockholders’ meeting, the company announced that once the backdoor listing of LBC is done, the courier will be renamed LBC Express Holdings Inc.
LBC is one of the leading cargo and courier service providers in the country, providing both bulk cargo logistics and small time courier deliveries. It has more than a thousand branches in the country and 60 other branches abroad.
Since last year, LBC has been scouting for a company to use as a vehicle for a backdoor listing.
LBC had earlier mentioned that it prefers to raise funds from the equities market for its expansion plans in the next few years.
So far this year, only two companies have listed on the PSE via the initial public offering route: the P222-million public offering of Crown Asia Chemicals Corp. and the P1.15 billion IPO of SBS Philippines Corp.
Besides LBC, National Bookstore is reportedly also planning a backdoor listing via Vulcan Industrial & Mining Corp. which is expected at a later time.
IPO hopefuls this year include construction firm Datem Inc. (P4.65 billion), D.M. Wenceslao & Associates Inc. (P21.7 billion), restaurant chain operator Gweilo Corp. (P75 million), Green Power Panay Philippines Inc. (P290 million), property developer Italpinas Development Corp. (P242 million), retail operator Metro Retail Stores Group Inc. (P6.1 billion), and stock brokerage firm Philstocks Financial Inc. (P185.89 million).
Other than listings, the PSE is also on track with its capital raising target of P200 billion for the whole of 2015, having recorded P105 billion worth of capital raising activities as of August 15.