The Securities and Exchange Commission will reject the P1.2-billion planned follow-on offering of courier operator LBC Express Holdings Inc. of the Araneta Group.
Informed sources said the corporate regulator was drafting a letter informing the company about the non-approval of the planned share sale.
SEC commissioner Ephyro Luis Amatong in a text message confirmed the SEC’s forthcoming decision to reject LBC’s share sale,
“LBC failed to make required disclosures regarding legal proceedings against its controlling shareholders,” Amatong said.
“At the same time, the 180-day effectivity of its financial statements ran out,” he added.
LBC in October filed with the SEC an application to sell 69.1 million shares with a proposed maximum offering price of P17 apiece.
The shares consist of 59.1 million in secondary shares and 10 million in primary shares.
Philippine Commercial Capital Inc. was the proposed sole underwriter for the offering.
LBC had planned to use the net proceeds from the offering to fund general corporate activities and working capital, including the expansion of the retail and corporate businesses and information technology development.
The company earlier scheduled to conduct the follow on-offering in February. LBC in 2014 filed a application to raise as much as P7 billon through an initial public offering.
However the LBC’s IPO application faced stiff scrutiny from the SEC because of its connection with shuttered bank LBC Development Bank, a thrift bank also owned by the Araneta group
This prompted LBC to withdraw the IPO application, after saying that other fund raising opportunities presented themselves.
But after a year, the LBC group conducted a backdoor listing through then dormant listed Federal Resources Investment Group Inc. The move paved the way for the company to have its shares listed with the Philippine Stock Exchange.
LBC plans to rollout 70 to 100 outlets this year in a bid to strengthen its position as the leading courier and money transfer company in the Philippines.
At least 60 percent of new branches are expected to be in Luzon, mostly in the National Capital Region, Southern and Northern Luzon. The remaining 40 percent will be located in Visayas and Mindanao.
The company has a network of over 1,000 branches nationwide.
Aside from investing in organic growth of the company, LBC Express said it also planned product offerings by selectively and strategically pursuing acquisition opportunities.
LBC Express said it would target potential companies for acquisition if they had synergies with the existing operational platform, the potential to expand its customer base and market share and could provide a platform to expand into new businesses.