LBC Express informed the local bourse that its board of directors approved on Tuesday (June 20) the issuance of a $50-million convertible instrument due on 2024 in favour of CP Briks Pte Ltd, a special purpose vehicle of Crescent Point.
Crescent Point is a China, Southeast Asia and Australia focused private equity and special situations investment firm.
LBC Express made the disclosure following its recent failure in getting approval from the Securities and Exchange Commission to hold a P1.2 billion share sale to fund its expansion.
“The proceeds of the convertible instrument will be used to fund the growth of the business of the company, including capital expenditures and working capital,” LBC Express said in its statement.
Meant to be issued out of the unissued portion of the company’s authorized capital stock, the convertible instrument shall be convertible to shares of LBC Express.
Pending approval of LBC Express’s shareholders, its obligations shall be secured by a third party pledge to be extended by its parent company LBC Development Corporation.
LBC Express entered into an Omnibus Agreement wherein it agreed to issue, and CP Briks agreed to purchase, the LBC convertible instrument, based on certain conditions including the final approval of CP Briks’ investment committee.
In 2016, owners of LBC’s now defunct LBC Development Bank were charged with estafa and violation of the PDIC (Philippine Depository Insurance Corp) Charter or Republic Act No. 3591 by conducting business in an “unsafe and unsound manner.”