Business World Online
Posted on 09:22 PM, October 28, 2010
LOPEZ-LED First Gen Corp. said yesterday it was not bound by a 60-day period to exercise its right of first refusal following the decision of business partner British Gas (BG) group to sell its 40% stake in two natural gas-fired power plants to Korea Electric Power Corp. (KEPCO).
In a statement, the power firm said the “right of first refusal provisions of the joint venture agreements with [BG Consolidated Holdings (Philippines), Inc.] does not apply to BG’s proposed transaction.”
It also said parent First Philippine Holdings Corp. is not covered by the same provisions.
Earlier, First Gen said it might question the BG group’s decision to sell the stake to KEPCO, pointing out that the Korean power producer is a direct competitor.
First Gen and BG Holdings own the 60-40 venture First Gas Holdings Corp. First Gas runs the 1,000-megawatt (MW) Sta. Rita and the 500-MW San Lorenzo power plants.
The two plants in Batangas supply power to Manila Electric Co., and rely on natural gas from the Malampaya field off Palawan.
KEPCO, meanwhile, owns the 1,200-MW Ilijan power plant, also in Batangas. The Ilijan plant likewise gets natural gas from Malampaya.
Reports indicated that First Gen only had until Nov. 29 to invoke its right of first refusal against the sale of BG Holdings’ assets in the Philippines.
BG Holdings sold its 40% share in First Gas to KEPCO for $400 million last month. The group sold off its energy assets in the United States earlier this year for $450 million.
First Gen President Giles B. Puno reiterated yesterday First Gen was still evaluating its options.
Early this month, he said: “[If First Gen] is looking at gas expansion [projects], these could be in potential competition with KEPCO ... If we feel that it is potentially conflicting then from our agreement [with BG Holdings], we may have a problem with [the sale].”
The power company and its parent, First Holdings, had said they hope to “reach a decision on which option to take by the end of the year.”
First Gen had disclosed to the stock exchange that payment from KEPCO was not expected until the first quarter of 2011, which provides time for the company to consider its options.
For the first half of the year, First Gen’s net income increased by 158% to $50 million from $19.4 million in the same period last year.
Revenues from electricity sales of the Sta. Rita and San Lorenzo gas-fired power plants increased by 16% to $599.1 million in the first half, up from last year’s $517 million. --E. N. J. David
It also said parent First Philippine Holdings Corp. is not covered by the same provisions.
Earlier, First Gen said it might question the BG group’s decision to sell the stake to KEPCO, pointing out that the Korean power producer is a direct competitor.
First Gen and BG Holdings own the 60-40 venture First Gas Holdings Corp. First Gas runs the 1,000-megawatt (MW) Sta. Rita and the 500-MW San Lorenzo power plants.
The two plants in Batangas supply power to Manila Electric Co., and rely on natural gas from the Malampaya field off Palawan.
KEPCO, meanwhile, owns the 1,200-MW Ilijan power plant, also in Batangas. The Ilijan plant likewise gets natural gas from Malampaya.
Reports indicated that First Gen only had until Nov. 29 to invoke its right of first refusal against the sale of BG Holdings’ assets in the Philippines.
BG Holdings sold its 40% share in First Gas to KEPCO for $400 million last month. The group sold off its energy assets in the United States earlier this year for $450 million.
First Gen President Giles B. Puno reiterated yesterday First Gen was still evaluating its options.
Early this month, he said: “[If First Gen] is looking at gas expansion [projects], these could be in potential competition with KEPCO ... If we feel that it is potentially conflicting then from our agreement [with BG Holdings], we may have a problem with [the sale].”
The power company and its parent, First Holdings, had said they hope to “reach a decision on which option to take by the end of the year.”
First Gen had disclosed to the stock exchange that payment from KEPCO was not expected until the first quarter of 2011, which provides time for the company to consider its options.
For the first half of the year, First Gen’s net income increased by 158% to $50 million from $19.4 million in the same period last year.
Revenues from electricity sales of the Sta. Rita and San Lorenzo gas-fired power plants increased by 16% to $599.1 million in the first half, up from last year’s $517 million. --E. N. J. David
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