First Gen gets P1.8B from parent firm

Lopez-led First Gen Corp. has received an additional P1.8 billion investment from its parent firm as the company raises cash for the expansion of its subsidiaries’ operations.

In a disclosure, First Philippine Holdings Corp. (FPHC) said the additional cash represented payment for the 33.75 million series “G” perpetual shares of First Gen acquired earlier this month.

“The additional investment is by way of FPHC’s payment of the difference between the issue price it previously paid, or P10 per share, and the issue price for the publicly-offered shares of P100 per share, for 20 million Series ‘G’ Shares,” FPHC said in a disclosure.

Earlier this month, First Gen issued 100 million series “G” shares, worth as much as P10 billion. The cumulative, nonvoting, nonparticipating, nonconvertible peso-denominated Series “G” shares, were listed on the Philippine Stock Exchange on May 18.

“With this additional investment, FPHC’s 20 million Series “G” shares will now be able to enjoy the same rights and benefits as the holders of the 100 million Series ‘G’ shares,” the company said.

First Gen earlier said it was looking at two options on how to use the funds raised through the issuance. One was to use the bulk, or P9.5 billion, to fund the company’s acquisitions this year, which may be undertaken directly or indirectly by any of its affiliates and subsidiaries.

These may include the acquisition of the 40-percent stake of the British Gas (BG) Group in the two natural gas-fired power plants in Batangas, which FirstGen co-owns and operates.

First Gen still owns 60 percent of First Gas Holdings, the parent company of First Gas Power, while the remaining 40 percent is held by the BG Group.

Should the opportunity arise, the company is prepared to acquire the 40-percent stake of the BG Group as it intends to earmark for this purpose the proceeds of the issuance of preferred shares.

Another option is to earmark P3.7 billion for the redemption of its convertible bonds and another P5.8 billion to make a partial payment of the debt of its affiliate, Red Vulcan.