Biz Buzz: Acquirer mode
Now that the fragmented logistics industry has become a fertile ground for mergers and acquisitions (M&As), LBC Express Holdings—which holds an estimated 86 percent of the retail express (parcel delivery business)—aims to be a consolidator.
LBC chief finance officer Enrique Rey Jr. said after the company’s stockholders’ meeting that the group was in live discussions on potential acquisitions. Right now, LBC is talking to one regional player and one local firm.
“We are looking for companies that are similar to what we do and will enhance the existing service that we have,” Rey said.
But what if other groups offer to buy LBC instead? It’s not for sale, Rey stated, adding that there was no intention from their grandparents (who had set up the company) to sell more than the secondary shares (59.1 million shares) proposed to be included in a follow-on offering (which also includes 10 million new shares).
On the $50-million, seven-year convertible notes issued to Singaporean fund CP Briks (which are convertible at a price per share of P13), LBC officials aren’t worried about issuing too much collateral. All of LBC Express Holdings’ shares in the logistics company are pledged as collateral to the convertible notes.
“At the end of the day, it’s only worth what you borrow. At the end of the day, what’s due is just the amount lent to you,” Rey said.
Whether or not regulators approve LBC’s follow-on offering, company officials are confident that the earnings flow would be more than enough to cover the $50-million “overcollateralized” loan. —DORIS DUMLAO-ABADILLA
Trouble in Ecology, part 2
The excitement never seems to end for residents of Ecology Village in Makati City since trouble came knocking at the upscale gated community earlier this year.
The normally quiet community of Ecology Village was upended recently when a group of what one resident described as “armed goons” entered the exclusive subdivision and took possession of one of the townhouses there that was the subject of an ownership dispute between the siblings of a late businessman whose interests were once front-and-center during the Marcos years.
In what was a virtual repeat of another security scare last February, a convoy of vehicles full of personnel (many of whom were armed, according to residents who were shown the CCTV videos from the incident) approached the village’s main gate in an attempt to proceed to the disputed property.
They were stopped initially by the gate guards of the village, but it soon became apparent that the two guards on duty—being threatened verbally and faced with superior numbers —were no match for all the muscle in the three-vehicle convoy.
After what appeared to be a short and heated discussion, some men from the vehicle alighted and opened the boom gate themselves as the outnumbered village guards looked on helplessly. And into the village entered the three vehicles, the last one being a minivan bearing the name of the “Mulawin” security agency.
It was unclear what the men wanted from the disputed property in question, but the men did leave eventually after a tense period, leaving behind—curiously—several magazines of ammunition as well as bladed weapons.
And just like the incident earlier this year, Biz Buzz was told that these men were acting under the orders of a “junior” who shares the same name as the “senior” who, in the early 1980s, built (but failed to complete) what is now the Alphaland Southgate building that towers over Ecology Village.
Naturally, the well-heeled residents of the village were left somewhat nervous and jumpy by the incident. As such, the village gates are now kept closed at all times, to be opened only when vehicles of confirmed residents pass.
But will this be enough to deter the perpetrators? Will there be another security scare? We hope not. It seems to be too much trouble over a townhouse, but… abangan. —DAXIM L. LUCAS
Speaking of retirement, Union Bank’s long-time chair and chief executive officer (CEO) Justo Ortiz is partially retiring after recently acquiring senior citizenship status. This must be part of the bank’s succession planning.
Effective Jan. 1, 2018, Ortiz will give up the CEO post but remains as chair of the bank. This means he will cede many of the daily responsibilities that he had been handling since 1993 but still be part of the bank’s strategic planning.
Edwin Bautista, president and chief operating officer of the bank, will thus be promoted to CEO.
Meanwhile, the bank’s senior executive vice president Eugene Acevedo was designated “chief mass market” and “financial inclusion” executive, which means that Union Bank will more aggressively go after the consumer business and likewise pursue unserved or underserved markets. —DORIS DUMLAO-ABADILLA