Business World Online
Posted on May 01, 2012 10:22:37 PM
LOPEZ-LED First Gen Corp., which runs renewable energy plants, is looking to exercise its option to acquire a stake in a coal-fired generator in Quezon by partly funding its expansion.
The company is mulling over the possibility of paying 30% of TeaM Energy’s share in the expansion, an official said.
“We’re considering it because of the need for new capacity in the country. When we partnered with TeaM Energy, part of our agreement was that although we could not bid... they would give us rights if they decide to expand,” First Gen President Francis Giles B. Puno told reporters in an interview.
TeaM Energy, a Japanese consortium, currently owns half of the Pagbilao coal plant with the balance held by Aboitiz Power Corp.
The expansion is estimated to cost around $600 million to $700 million which will be shared 50-50 between TeaM Energy and Aboitiz Power.
The 700-megawatt (MW) Pagbilao coal power plant will have an additional capacity of 400 MW once expansion work is completed by 2015.
Mr. Puno said the decision to possibly fund the expansion of the traditional fuel power plant is still under discussion with TeaM Energy.
“It’s a little bit going against our religion [of generating clean energy] but at the same time we realize that the market is less interested in the cleaner renewable energy than cheaper [sources],” said Mr. Puno.
In a related development, Mr. Puno said First Gen is still determining whether it will use proceeds from its issuance of series “G” preferred shares to buy the stake of British Gas (BG) in First Gas, a partnership between First Gen and BG.
BG earlier announced it is intending to sell its 40% in First Gas for $400 million. First Gas has the right of first refusal.
“We’ve always expressed interest in acquiring the BG stake. I know they want to sell it but they’re taking their time. In our case, having the money is helpful so when you talk to the potential seller, having the money in your bank account signifies the seriousness of your offer,” said Mr. Puno.
The firm will be issuing up to 135 million series “G” preferred shares which will increase its authorized capital stock to P8.6 billion from P7.25 billion.
Mr. Puno said proceeds from the issuance will also be used to pay down maturing debts in 2013. He said after the payments, there would be around $6.5 billion left for investments.
First Gen’s attributable net income to parent in 2011 declined by 50.1% to $35 million from $70.2 million at the end of 2010.
Shares of First Gen closed at P14.12 on Monday, up 1% from its previous close. -- E. N. J. David source
TeaM Energy, a Japanese consortium, currently owns half of the Pagbilao coal plant with the balance held by Aboitiz Power Corp.
The expansion is estimated to cost around $600 million to $700 million which will be shared 50-50 between TeaM Energy and Aboitiz Power.
The 700-megawatt (MW) Pagbilao coal power plant will have an additional capacity of 400 MW once expansion work is completed by 2015.
Mr. Puno said the decision to possibly fund the expansion of the traditional fuel power plant is still under discussion with TeaM Energy.
“It’s a little bit going against our religion [of generating clean energy] but at the same time we realize that the market is less interested in the cleaner renewable energy than cheaper [sources],” said Mr. Puno.
In a related development, Mr. Puno said First Gen is still determining whether it will use proceeds from its issuance of series “G” preferred shares to buy the stake of British Gas (BG) in First Gas, a partnership between First Gen and BG.
BG earlier announced it is intending to sell its 40% in First Gas for $400 million. First Gas has the right of first refusal.
“We’ve always expressed interest in acquiring the BG stake. I know they want to sell it but they’re taking their time. In our case, having the money is helpful so when you talk to the potential seller, having the money in your bank account signifies the seriousness of your offer,” said Mr. Puno.
The firm will be issuing up to 135 million series “G” preferred shares which will increase its authorized capital stock to P8.6 billion from P7.25 billion.
Mr. Puno said proceeds from the issuance will also be used to pay down maturing debts in 2013. He said after the payments, there would be around $6.5 billion left for investments.
First Gen’s attributable net income to parent in 2011 declined by 50.1% to $35 million from $70.2 million at the end of 2010.
Shares of First Gen closed at P14.12 on Monday, up 1% from its previous close. -- E. N. J. David source
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