First Gen unit prepays P5.6-B debt

business mirror

TUESDAY, 12 JULY 2011 18:17 PAUL ANTHONY A. ISLA

LISTED First Gen Corp. said on Tuesday its subsidiary Unified Holdings Corp.  has prepaid a P5.6-billion 3-year corporate note facility. 

In a disclosure to the Philippine Stock Exchange, First Gen said Unified Holdings prepaid the said loan facility which had an interest rate of 9.3769 percent. 

On May 9, 2009, Unified Holdings signed an agreement for the said notes facility arranged by a consortium of banks led by BDO Capital and Investment Corp., Philippine National Bank, and the Rizal Commercial Banking Corp. 

First Gen earlier said it is looking at issuing P7-billion worth of perpetual preferred shares in the second half of the year to raise funds to pay down maturing obligations in the near term.

Emmanuel Singson, First Gen chief financial officer, told reporters proceeds of the share issuance will “take care of paying upcoming maturities in 2012 and 2013. It can be used to pay down maturing debts next year and the convertible bonds due to mature on 2013 as well.” Maturing debts next year will amount to P5 billion, while those falling due on 2013 will reach $130 million. 

Singson said they are looking at issuing the preferred shares by the second half of the year. 

Francis Giles Puno, First Gen president and chief operating officer, confirmed in his presentation that his company is also preparing to pay down its debts amounting to P5 billion and $130 million due to mature on 2012 and 2013, respectively. 

First Gen, according to Puno, signed three new loans last year—a P3.75-billion five-year loan with the BDO group, a six -and seven-year $142-million syndicated loan from a consortium of local and foreign commercial banks, and another $100 million six- and seven year notes facility also from BDO.

Puno said these transactions generated savings on interest costs by prepaying costlier debt and extinguishing short-term debt. First Gen’s consolidated interest-bearing debt level decreased by 11 percent or $130 million from $1.13 billion in 2009 to $1 billion in 2010.

First Gen said funds from the rights offer were used to fully pay the P5-billion five-year bond that matured in July 2010 and buy back $754 million of First Gen convertible bonds in anticipation of a put option date in February 2011.

In addition, Red Vulcan Holdings Corp., the affiliate that directly owns 40 percent common shares and 100-percent preferred shares of EDC, likewise benefited from lower interest expense by reducing debt by 40 percent or P5.5 billion to P8.3 billion from the P13.8 billion while Prime Terracota Holdings Corp., the entity that owns Red Vulcan, fully paid its debt of P2.5 billion.

FG Hydro, the owner and operator of Pantabangan-Masiway hydro plants, successfully raised a P5-billion 10-year term loan from the Philippine National Bank and Allied Banking Corp. 

(Paul Anthony A. Isla)