First Gen eyeing debt market in third quarter

Business World Online

Posted on May 08, 2013 11:10:51 PM

LOPEZ-LED First Gen Corp. may start tapping the debt market next quarter to help fund the second phase of its San Gabriel natural gas power project in Batangas, officials told reporters after the company’s annual stockholders’ meeting yesterday at Rockwell Tent in Makati City.

“For the first phase of the San Gabriel, that’s 100 megawatts (MW) for about $100 million. We could fund that. But we need around $500 million for the second phase, so we have to tap the debt markets,” First Gen President and Chief Operating Officer Francis Giles B. Puno said when asked on the company’s planned fund raising activities.

The second phase of the project involves construction of a 400-MW natural-gas fired power plant.

“We will tap slowly. We won’t do it $500 million one time so it’s progress billing because we have to time it very well,” Emmanuel P. Singson, First Gen chief finance officer, said.

ALL TYPES
Mr. Singson said that First Gen might start tapping the debt market in the third quarter of this year in time for the planned construction of the second power plant next year.

“It could start in the third quarter,” he said.

“We try to scout the market and see what’s conducive. So we look at syndicated loans, bonds in peso or dollar. All types of fund-raising,” he explained.

In March last year, First Gen said that its planned San Gabriel natural gas project in Batangas will involve a total capacity of 1,300 MW, which will come in three phases.

The first phase, which will cost around $100 million, will involve a 100-MW power plant.

This is targeted to start constructed within the year, and scheduled to be completed by 2014.

The second phase will involve 400-MW plant that will be built at estimated cost of $500 million. This unit is targeted for completion in 2016.

The last phase will involve two 400-MW units and will cost around $800 million. The facility is targeted to be completed by 2018.

The San Gabriel project will be located in First Gen’s power complex where Santa Rita and San Lorenzo natural gas-fired plants are located.

First Gen, through its subsidiaries, First Gas Power Corp. and FGP Corp., owns and operates the 1,000-MW Sta. Rita and 500-MW San Lorenzo power plants in Batangas.

First Gen, which was incorporated in 1998, is the holding firm for the power generation businesses of the Lopez group.

The company has an several power plants with a total installed capacity of 2,763 MW, according to its 2012 annual report.

The company saw its net income more than double to $207.032 million last year from $86.610 million in 2011 on back of the strong performance of its business units. Revenues rose by 11.95% to $1.527 billion from $1.364 billion, while cost of services and expenses increased by 5.3% to $1.196 billion from $1.136 billion.

First Gen shares gained five centavos or 0.22% to close at P22.45 apiece from P22.40 each on Tuesday. -- Claire-Ann Marie C. Feliciano  source