First Gen boosting capital
Lopez-led First Gen Corp. plans to increase its authorized capital stock to P8.6 billion from P7.25 billion.
The move will allow the company to pursue the proposed creation of 135-million new “Series G” preferred shares.
This, however, will have to be submitted for stockholders’ approval in a special stockholders’ meeting on Jan. 25, 2012, said First Gen in a disclosure to the Philippine Stock Exchange.
The proposed Series G preferred shares, which will have a par value of P10 a piece. The issue value and dividend rate to be given to Series G shareholders will be determined by the board of directors at the time of issuance. The shares will be nonvoting, nonparticipating and redeemable at the option of the company.
In the event of liquidation, dissolution, distribution of assets or winding up of the company, the Series G preferred shares will be entitled to be paid at their issue value plus accrued and unpaid dividends.
According to a company source, the issuance of the Series G preferred shares, which will be done by way of increasing the company’s capital stock, will be done in preparation for “possible financing initiatives in the future.”
In July, First Gen issued P10-billion worth of perpetual Series F preferred shares, the proceeds of which were used to refinance debt obligation and buy back the company’s 2.5-percent convertible bonds due 2013. A portion was supposed to be used to partially finance various acquisitions, investments and development projects.
Since last year, First Gen and its subsidiaries have been taking advantage of a highly liquid market by raising fresh funds through rights offering, syndicated term loan and notes facility. These transactions generated savings on interests by prepaying costlier debt.
First Gen’s consolidated interest-bearing debt level dropped 11 percent, or $130 million, to $1 billion as of end-2010.
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