First Gen raises P10B through shares issuance

Lopez-led First Gen Corp. has raised P10 billion from the issuance of 100 million Series “G” perpetual preferred shares last week.

First Gen president Francis Giles Puno said through a text message Monday that the company was able to “upsize to a P10-billion issuance” after its issue manager and sole bookrunner for the offer had exercised in full the oversubscription option.

In a separate disclosure to the Philippine Stock Exchange, First Gen said BDO Capital and Investment Corp. had taken up the oversubscription option of 30 million Series G preferred shares.

The cumulative, nonvoting, nonparticipating, nonconvertible peso-denominated Series “G” shares, priced at P100 apiece, will be listed on the bourse on May 18.

First Gen earlier said it was looking at two options on how to use the proceeds from the said 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.

Specifically, this referred to 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.

Puno said that 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 its planned 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. Banco de Oro Unibank Inc. and Banco de Oro Unibank Inc.—Trust and Investments Group are the creditors of Red Vulcan, which is the holding company for First Gen’s economic stake in Energy Development Corp.

The proceeds of the offer will likewise be used for general corporate purposes. These include working capital, interest expenses and business development-related expenses, the apportioning of which has yet to be determined.