Lopez-owned First Gen Corp., the country’s largest Filipino-controlled independent power producer, is raising its capitalization to P3.65 billion from P1.65 to fund planned acquisitions.
In a disclosure to the Philippine Stock Exchange, First Gen said the capital hike will be implemented through the creation of 200 million preferred shares with a par value of P10 per share.
“The increase in authorized capital stock is intended to raise funds for various corporate purposes, including but not limited to acquisitions of power and other related projects from the government and private institutions,” First Gen said.
The board of First Gen also approved the declaration of cash dividends amounting to P2.50 per share on all outstanding common shares in favor of stockholders of record as of September 7, 2007, payable on September 14.
The company also approved the declaration of cash dividends of P0.05 per share to all shareholders of preferred shares as of record of Sept.7, payable on Sept. 13.
In addition, First Gen’s board approved a buy-back program involving up to P2 billion worth of common shares, representing approximately four percent of the company’s current market capitalization. The amount may be increased by the board of directors from time to time as the circumstances warrant.
First Gen reported a 75 percent jump in its net profit in the six months ending June this year to $72 million, mainly driven by the income contribution from its most recent acquisition, the 112-megawatt (MW) Pantabangan/Masiway hydroelectric complex, the higher dispatch of natural gas-fired plants, and higher non-recurring income.
Pantabangan/Masiway earned the company $17 million in the first half this year while the 1,000-MW Santa Rita and 500-MW San Lorenzo gas plants, recorded highest dispatch levels in the grid.
First Gen vice-chairman and chief executive officer Peter Garrucho Jr. said the significant rise in its first half profit was also due to non-recurring gains of about $12 million.
Consolidated revenues from the sale of electricity rose 16 percent to $516 million.
First Gen said consolidated liabilities declined to $92 million despite new borrowings of $77 million last year from the Power Sector Assets and Liabilities Management Corp. (PSALM) for the acquisition of Pantabangan/Masiway.
Aside from its scheduled payments of debt amounting to $96 million, Santa Rita prepaid $84 million worth of liabilities last February. The gas projects’ borrowings now total $430 million, down 53 percent from the original $906 million.
Pantabangan/Masiway, on the other hand, made its first debt payment to PSALM of $8 million last May.
First Gen also said affiliate Bauang Corp. is now debt-free after prepaying its 144-A notes.