First Gen borrows $50 million more

Business Mirror

29 Oct 2013 

 

Written by Lenie Lectura

FIRST Gen Corp. of the Lopez Group of Companies on Tuesday said it raised an additional $50 million from a dollar-bond issuance.

“Further to our earlier disclosure on the reopening of US dollar bond issue, please be informed that the company has issued an additional $50 million at an issue price of 100.125. The additional notes were issued under the terms and conditions of First Gen’s outstanding $250 million, 6.5 percent senior unsecured fixed-rate notes due October 2023,” the company said in a disclosure to the stock exchange.

The company has successfully raised $250 million from the issuance of 10-year bonds. Proceeds of the fund-raising exercise will be used to partly finance the construction of the company’s San Gabriel natural gas-power project in Batangas.

First Gen President Francis Giles Puno said the company will need an estimated $1.25 billion more to finish the construction of the power facility.

He said total capital expenditure for the first two phases of the project is “about $650 million.” Of this amount, the company has already raised $250 million.

“We will borrow probably an additional $250 million and then the $100 million will be internally generated. Hopefully we can also get that completed,” he said.

The San Gabriel project will be built in three phases. The first phase, referred to as the San Gabriel Avion project, will have 100 megawatts (MW) of power capacity. Completion is set for the last quarter of 2014.

The second phase involves the construction of one 400-MW unit that will be completed by March 2016. First Gen said it needs to work on its financing plan if it wants to meet its 2016 target.

“Total [capacity] will be about 500 MW. The first $250 million will be earmarked for the construction of Avion, which is 100 MW. For the 400 MW, we expect to raise more borrowings, depending on where we buy the equipment. We can tap what we call export-credit agencies. There is available export-credit financing when you order these equipment,” Puno explained.

The power-generation arm of the Lopez Group is considering all possible fund-raising options to finance the project, including export-credit financing which, Puno said, has a longer maturity date. “Our $250-million bond has a 10-year maturity date, while for export-credit financing it might take 12 years,” added the First Gen official.

The third phase of the San Gabriel project is composed of two 400-MW units and a liquefied natural gas receiving and regasification facility that can be completed by 2018.

“That’s probably another $900 million. Hopefully, we will be able to generate revenues from the 500 MW. Once it starts to generate revenue then we can reinvest in the 900 MW,” the official said.  source