PSE okays listing of Lopez’s First Gen

The Philippine Stock Exchange (PSE) said the Lopez-owned First Generation Holdings Corp. is not covered by the chain-listing rule, thus making it qualified for listing in the local bourse.

Under the rule, a subsidiary or parent company of an existing listed firm will not be considered suitable for listing if the assets and operations of the applicant are substantially the same as those of the existing listed entity.

First Gen is the holding company of the Lopez family’s power and energy-related businesses. It is 88.44-percent owned by First Philippine Holdings Corp. (FPHC).

PSE president and chief executive officer Francis Lim said the listing committee resolved that the assets and businesses of First Gen and FPHC are not substantially the same as FPHC’s investment in First Gen only accounts for 37 percent of its total assets.

In terms of operations and investments, First Gen focuses its investments on power generation while FPHC invests in divergent industries.

First Gen is eyeing to raise around P11.22 billion from the maiden offering of its shares next month. It plans to offer a minimum of 151.57 million shares at P74 per share up to a maximum of 219.93 million shares at P51 per share. The shares will be sold in both the local and international markets.

Once listed, First Gen will be the fifth company owned or controlled by the Lopez family to be traded on the exchange next to power utility giant Manila Electric Co. (Meralco), ABS-CBN Broadcasting Corp., Benpres Holdings Corp. and FPHC.

Tapped as global coordinator and bookrunner for the issue is Credit Lyonnaise SA while BDO Capital & Investment Corp. and ATR Kim Eng Capital will serve as lead managers for the domestic offer.

The book value of the company, based on its unaudited financial statements as of June 30, 2005, was P13.52 billion or P29.90 per share. The book value represents the amount of the company’s total assets less the sum of its liabilities less the equity of the outstanding value per share.

Proceeds from the offering will be used for improvements in existing facilities, investments in capacity expansion, which may include both potential acquisitions of power generation facilities and the development of greenfield projects as well as for general corporate purposes, including working capital and investments.

First Gen has set aside $12.7 million for its capital expenditures this year and next year, $10.7 million was planned for 2005. During the first six months of the year, First Gen already spent P86 million on the acquisition of the Agusan mini-hydro plant. First Gen will put up a new 550-megawatt combined cycle, gas-fired plant on the land adjacent to its Sta. Rita and San Lorenzo plants in Batangas.

As opportunities arise, the company intends to expand into businesses that complement its power generation operations, as well as seek to leverage its relationship with the Lopez Group.

First Gen’s plans include the development of downstream natural gas transmission and distribution facilities and the development of fuel-related services which may include liquefied natural gas import terminals, fuel tanker chartering and oil pipeline management.

First Gen controls some 1,725 megawatts of installed capacity and is one of the largest independent power generation companies in the country.

Last year, First Gen posted a net income of P4.96 billion, 6.94-percent lower than the previous year’s P5.33 billion. Revenues, on the other hand, rose to P37.04 billion from P36.43 billion in 2003.