First Gen acquires 40% of First Gas holdings

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WEDNESDAY, 30 MAY 2012 22:55 PAUL ANTHONY A. ISLA / REPORTER

LISTED First Gen Corp. said on Wednesday it acquired the entire outstanding capital stock of Lisbon Star Management Ltd. (LSML) from BG Asia Pacific Holdings Pte. Ltd. (BGAPH).

The stocks, equivalent to 40 percent of First Gas Holdings Corp. (FGHC), were acquired for P360 million.

In a disclosure to the Philippine Stock Exchange, First Gen said LSML is a company registered in the British Virgin Islands.  LSML’s Philippine subsidiaries—BG Consolidated Holdings (Philippines) Inc. and BG Philippines Holdings Inc. ”own 40-percent interests in FGHC, FGP Corp. [FGP] and First NatGas Power Corp. [FNPC],” First Gen said.

Following the acquisition of LSML, First Gen will beneficially own 100 percent of the Santa Rita and San Lorenzo power projects. 

First Gen said the acquisition was made through its wholly owned subsidiary Blue Vulcan Holdings Corp. (BVHC), which signed and closed a share purchase agreement with BGAPH on May 30, 2012. 

FGHC, through its wholly owned subsidiary, First Gas Power Corp. owns and operates the 1,000-megawatt (MW) combined cycle Santa Rita natural gas-fired power plant. FGP owns and operates the 500-MW combined cycle San Lorenzo natural gas-fired power plant.

  FNPC is the corporate vehicle for the development of the San Gabriel power plant project.

  “We are extremely pleased with the closing and completion of this transaction.  Santa Rita and San Lorenzo continue to perform reliably and have delivered consistent returns since the start of their commercial operations in 2000 and 2002, respectively,” Federico R. Lopez, First Gen chairman and chief executive, said.

The natural gas plants are the Lopez group’s largest foray into the power generation business prior to Energy Development Corp.  (EDC) and have been instrumental in making the Malampaya gas-to-power project viable, he added.

“Our partnership with BG in the gas projects has been one of the most successful foreign partnerships in the country.

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 Electric Power Industry Reform Act [Epira],” Lopez said.

BVHC will fund the acquisition with the proceeds of the recently issued P10-billion Series “G” Perpetual Preferred Shares of its parent First Gen, loans and internal cash.

First Gen 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’s net attributable capacity has increased to 2,144 MW from 1,544 MW with the conclusion of this purchase, and has a total of 15 power plants powered by indigenous fuel. These are natural gas, geothermal steam and hydro, which accounts for approximately 18 percent of the total installed capacity in the country.   source