MANILA, Philippines - Federal Resources Investment Group Inc., owned by courier and cargo firm LBC Development, is proceeding with its planned follow-on offering which is estimated to raise about P7 billion.
In a disclosure to the Philippine Stock Exchange (PSE), Federal Resources said its board of directors approved the issuance of up to 10 million new common shares through a primary offering and up to 59.1 million shares via a secondary offering.
Federal Resources shall soon file its registration statement and prospectus with state regulators.
Banking sources said Federal plans to raise P7 billion from the offering to be used for the ongoing expansion of LBC Express. The company plans to open 100 branches every year.
The listing is targeted in mid-November.
In May, LBC Development acquired a majority stake in Federal Resources, which in turn folded LBC Express into the listed shell company.
LBC Development said it was acquiring more shares in Federal Resources. To accommodate the issuance of shares, Federal Resources is beefing up its capitalization to P2 billion divided into two billion shares with par value of P1 each share.
At the same time, Federal Resources sought several amendments to its Articles of Incorporation and By-Laws to pave the way for its transformation into the cargo and courier business of LBC, which is owned by the Araneta Group.
LBC Express is involved in logistics and money transfer services. It has roughly 1,100 stores nationwide and 70 stores in 22 countries.