Corporate News

LBC sets pricing for follow-on offer

Posted on December 03, 2016

LBC Express Holdings, Inc. has priced its follow-on offering of 69.101 million common shares at P17 each to raise up to P1.17 billion in capital for the company with holdings in logistics and money transfer services.

In a disclosure to the stock exchange on Friday, LBC said it has sought approval from the Securities and Exchange Commission (SEC) on Thursday, Dec. 1, for the registration of the shares on offer, consisting of 10 million new common shares and 59.101 million in existing common shares.

“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,” the company said.

The 10 million shares will be issued and sold by the company through a primary offering while the 59.101 million shares will be offered by selling shareholders via a secondary offering.

LBC set the indicative offer price of the follow-on offering at up to P17 per share.

Philippine Commercial Capital, Inc. is the sole underwriter for the deal. The follow-on offering is subject to the approval of the SEC and The Philippine Stock Exchange, Inc.

LBC’s entry into the bourse came via the acquisition by LBC Development Corp. of 59.1% of listed company Federal Resources Investment Group, Inc., which had transformed into a holding firm from being a manufacturer of various adhesives and sealants and other chemicals. The company was formerly known as Federal Chemicals, Inc.

The new owner acquired more shares and increased its equity interest to 84.6%, subsequently securing approval to change its corporate name to the present one in October 2015.

Logistics remains the core business of LBC and accounted for 87% of revenues as of the third quarter. The business segment is largely made up of retail services, although the company said its corporate unit had shown “exponential growth.” 

LBC continued its push for retail expansion, which led to the opening of 30 new branches so far this year, with around 10 more expected by yearend. It also said its money business -- at least in the Philippines -- remains profitable.

Last month, LBC reported P208.7 million in third-quarter net income attributable to the shareholders of the parent company, more than double yearago’s P104.64 million. For the January-September period, the company posted P627.35 million, up 54% from P407.03 million in the same period last year.

Revenues for the third quarter rose 13% to P2.22 billion from P1.97 billion. As of September, the figure hit P6.36 billion, up 11% from P5.71 billion previously. LBC said it expects “stronger sales, lower costs and improved efficiencies” in the fourth quarter. 

Shares in LBC slipped by 0.88% to P13.48 each on Friday’s session. -- Victor V. Saulon