Holding company Federal Resources Investment Group, Inc. (FED) has entered into a deal with courier operator LBC Development Corp., which has been reported to have plans for a back-door listing with the Philippine Stock Exchange (PSE).
In a disclosure to PSE, FED said it entered into a deed of subscription relating to the issuance to LBC of 59.101 million shares of the company, at the issue value of P1 per share or equal to the par value of the common shares of FED, which amounted to a subscription price of P59.101 million.
The closing of the share issuance is still subject to all regulations.
FED last April said its Board already approved the issuance of 59.1 million common shares from its unissued authorized capital stock to LBC at P1 per share, and will enable LBC to absorb FED and gain a backdoor listing.
LBC Development Corp., the parent firm of cargo and courier services provider LBC Express Inc., has been planning to debut on the stock market through an initial public offering (IPO) in 2014 but dropped the idea and instead looked for a dormant company to be used for a backdoor listing.
Backdoor listing is a less expensive alternative to an IPO.
LBC earlier said the funds raised from the stock market will be used for expansion plans.
LBC Express, previously Luzon Brokerage Corp., has over a thousand branches in the Philippines and over 60 branches in the United States, Canada, and other countries.
