MANILA, Philippines [UPDATED] – The Lopez-led First Gen Corp. bought out the 40% stake of UK-based gas producer BG Group Plc in two gas-fried power generation plants in the Philippines.
The two firms announced on Wednesday, May 30, that the cash deal has been signed and completed. First Gen spent $360 million for the deal, sourced from its P10 billion preferred shares, loans and internal cash.
In a disclosure to the stock exchange, First Gen explained that this deal was borne out of BG’s plan to sell assets and get debt off its balance sheet, as well as focus on more lucrative gas and oil finds in Brazil and Australia.
The deal is between First Gen’s wholly owned subsidiary, Blue Vulcan Holdings Corp., and BG Group’s subsidiaries BG Asia Pacific Holdings Pte Limited and British Virgin Islands firm Lisbon Star Management Limited.
The deal will result in the Lopez firm owning 100% of the 1,000 MW Santa Rita and 500 MW San Lorenzo natural gas-fred power plants in Batangas.
“The natural gas plants were the Lopez group’s largest foray into he power generation business and have been instrumental in making the Malampaya gas-to-power project viable…Our partnership with BG in the gas projects has been one of the most successful foreign partnerships in the country,” said First Gen chairman and CEO Federico R. Lopez.
“This transaction increases First Gen’s attributable ownership by 600 MW to 2,144 MW and does not affect our ability to grow under the legal limits imposed by the EPIRA (Electric Power Industry Reform Act),” Lopez added.
First Gen has a total of 15 power plants powered by indigenous fuel; namely, natural gas, geothermal steam and hydro.
It is the largest vertically integrated power producer in the Philippines, with a capacity of 2,763 MW of clean and renewable energy in its portfolio. First Gen accounts for approximately 18% of total installed capacity in the country. – Rappler.com