First Gen fully exercises call option for 390M EDC shares

business mirror
MONDAY, 04 APRIL 2011 20:25 PAUL ANTHONY A. ISLA / REPORTER

LISTED First Gen Corp. (First Gen) said on Monday it has fully exercised a call option for over 390 million common shares of unit Energy Development Corp. (EDC) at the exercise price of P5.51 per share.

In a disclosure to the Philippine Stock Exchange (PSE), First Gen said the transaction will be made through a special block sale and cover the remainder of the 585 million shares subject of the call option agreements executed by First Gen on April 20, 2010 with PhilPlans First Inc., Rescom Developers Inc. and PhilHealthCare Inc./System Technology Institute Inc.

The company earlier exercised its call option on over 195 million shares.

A call option contract gives the holder the right to buy a certain quantity of an underlying security from the writer of the option, at a specified price and up to a specified date.

Company president Francis Giles Puno said exercising the remaining call option will increase First Gen’s economic ownership in EDC to over 46 percent.

“Although, there is a still work to be done in terms of improving operating efficiencies, this investment affirms our belief in the strong fundamental value of EDC,” Puno said.

First Gen said the call option agreements grant the company the option on over 585 million common shares representing about 3.12 percent of EDC’s total outstanding common stock within a period of three years or up to April 2013. This, at the exercise price of P5.67 for the first year, P6.19 for the second year, and P6.76 for the third year.

The exercise price of P5.51 represents the option price for the first year, adjusted for the cash dividend of P0.16 which was declared by the EDC board of directors on March 15, for stockholders on record as of March 29.