FED sets follow-on offer

DORMANT holding firm Federal Resources Investment Group Inc. (FED), the backdoor listing vehicle of courier service operator LBC Express, has approved a plan to conduct a follow-on shares offering.

Based on a disclosure to the Philippine Stock Exchange yesterday, FED approved the sale of 59.1 million secondary shares and 10 million common shares to the public. The offering is worth about P830 million based on current market prices, although follow-on offerings are usually priced at a discount to market.

Likewise approved by the board was the acquisition of 1.04 billion common shares of LBC Express and the subscription to 178.99 million common shares of FED.

As of yesterday, shares of FED closed at P12.02 a share, down by 3.84 percent. Market capitalization stood at P1.25 billion.

The board also authorized FED to file a registration statement for the offer shares with the Securities and Exchange Commission (SEC) as well as an application to list them on the PSE.

Theboard also approved the subscriptions of the following investors: Vittorio Lim, Mariano Martinez Jr. and Lowell Yu and the consequent issuance of a total of 178.99 million common shares out of the unissued authorized capital stock of FED to these subscribers upon the approval by the SEC of the proposed increase in the authorized capital stock of FED from P100 million to P2 billion at the subscription price of P1 a share. The subscription will be “under such terms and conditions as management may deem beneficial to the corporation.”

FED executed on Oct. 2 the acquisition from LBC Development Corp. of 1.04 billion issued and outstanding shares of stock of LBC Express at a price of P1.38 billion.

LBC Express holds the bulk of all the daily cargo space allocation of carriers Philippine Airlines and Cebu Pacific. It was the first to introduce 24-hour air service delivery in the country. In terms of distribution capability, it has more than a thousand branches in the Philippines and 60 branches in the United States, Canada and a host of other smaller countries.