First Holdings offshore unit to issue $35-M term notes

FGHC International Ltd. (FIL), an offshore subsidiary of First Philippine Holdings Corp. (FPHC), will issue $35 million worth of term notes to pay off some of its maturing obligations this month.

In a disclosure to the Philippine Stock Exchange (PSE), FPHC assistant information officer Rodolfo Waga said the notes will mature in 2011.

Waga said "FGHC has executed a note purchase agreement for the issuance of term notes due 2011 to AIMCF (Cayman Islands) Ltd. with the notes to be purchased by AIMCF having a principal amount of $35 million, subject to satisfaction of certain funding conditions."

The notes, Waga said, will be guaranteed by FPHC under a parent support agreement.

In turn, he said FPHC will be granting call options relating to shares in First Generation Holdings Corp. (First Gen) to AIMC under a call option agreement.

He explained that the AIMCF has an option to swap the loan for a 3.5-percent stake in First Gen. "The call options are to be initially held by AIMCF and would allow it to own a 3.5-percent stake in First Gen," he said.

"This will be at a premium over the valuation made relating to Sumitomo Corp.’s investment in First Gen last December 2001," he said.

He said AIMCF likewise has a one-time right to put all or part of the call options to FPHC subject to certain conditions.

Waga said the funds to be raised are intended to refinance, in part, FIL’s obligations which are guaranteed by FPHC and which are maturing this May 2003 and for other corporate purposes.

Sumitomo Corp. has infused $20 million into First Gen in exchange for 3.81-percent stake in the Lopez-controlled firm.

"Sumitomo’s investment is part of First Gen’s preparation for the privatization of National Power Corp. (Napocor) and the development of downstream gas business," First Gen president Peter Garrucho said.

First Gen owns 60-percent of First Gas Power Corp. which operates the 1,060-MW Sta. Rita and 500-MW San Lorenzo gas-fired power plants in Batangas.

First Gen also owns 37.3 percent of the Bauang Private Power Corp. which runs the 225-MW diesel-fired facility in La Union. – Donnabelle Gatdula