MANILA, Philippines—Six foreign companies have expressed interest in British Gas Group’s 40-percent stake in the 1,000-megawatt Sta. Rita and 500-MW San Lorenzo natural gas power plants in Batangas, First Gen Corp. chair and CEO Federico Lopez said.
Lopez, however, said First Gen had yet to formally respond to the companies that contacted his office to make their interest known.
He said First Gen, which holds the majority stake in the two natural gas-fired power plants, was still evaluating all possible options, including exercising its right of first refusal to buy its partner’s stake.
First Gen’s partner in these projects, the BG Group of the United Kingdom, signed a $400-million deal to sell its 40-percent equity in the power plants to Korea Electric Power Corp. (Kepco). The Korean firm, however, is deemed a competitor of First Gen.
If it waives this right, the BG Group is free to sell its stake to other companies.
It is also looking at the legal issues surrounding the BG Group’s deal with Kepco.
“(First Philippine Holdings Corp.) is building its war chest. Whether we use it for (the 40-percent stake) is the issue on hand,” Lopez stated.
FPHC is the Lopez group’s holding company for its power generation and distribution businesses.
Its power generation subsidiary, First Gen, owns 60 percent of First Gas Holdings—the parent company of First Gas Power Corp., which owns and operates the 1,000-megawatt Sta. Rita natural gas-fired power plant—and FGP Corp., which owns and operates the 500-MW San Lorenzo power facility.
The facilities, both in Batangas, use natural gas from the Malampaya gas field off northwest Palawan.
The sole competitor of the Lopez group in natural gas power facilities is Kepco’s 1,200-MW Ilijan power plant, which also sources gas from the Malampaya.
The BG Group signed last month a sale-and-purchase agreement with Kepco. The amount of the deal would still be subject to standard completion adjustments, including interest to be paid to BG Group upon closing, which is expected to happen in the first quarter of 2011.
Lopez, however, said First Gen had yet to formally respond to the companies that contacted his office to make their interest known.
He said First Gen, which holds the majority stake in the two natural gas-fired power plants, was still evaluating all possible options, including exercising its right of first refusal to buy its partner’s stake.
First Gen’s partner in these projects, the BG Group of the United Kingdom, signed a $400-million deal to sell its 40-percent equity in the power plants to Korea Electric Power Corp. (Kepco). The Korean firm, however, is deemed a competitor of First Gen.
If it waives this right, the BG Group is free to sell its stake to other companies.
It is also looking at the legal issues surrounding the BG Group’s deal with Kepco.
“(First Philippine Holdings Corp.) is building its war chest. Whether we use it for (the 40-percent stake) is the issue on hand,” Lopez stated.
FPHC is the Lopez group’s holding company for its power generation and distribution businesses.
Its power generation subsidiary, First Gen, owns 60 percent of First Gas Holdings—the parent company of First Gas Power Corp., which owns and operates the 1,000-megawatt Sta. Rita natural gas-fired power plant—and FGP Corp., which owns and operates the 500-MW San Lorenzo power facility.
The facilities, both in Batangas, use natural gas from the Malampaya gas field off northwest Palawan.
The sole competitor of the Lopez group in natural gas power facilities is Kepco’s 1,200-MW Ilijan power plant, which also sources gas from the Malampaya.
The BG Group signed last month a sale-and-purchase agreement with Kepco. The amount of the deal would still be subject to standard completion adjustments, including interest to be paid to BG Group upon closing, which is expected to happen in the first quarter of 2011.
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