First Philippine Holdings Corp. (FPHC) is setting aside $6.61 million out of the proceeds from its preferred share offering for amortization and interest payments for notes due in 2011.
In a disclosure to the Philippine Stock Exchange yesterday, FPHC said it would be making a $5-million payment as principal amortization and $1.61 million as interest payment under the $35-million term notes.
FPHC officials earlier said the company is considering the possibility of tapping the debt market again this year to fund loans maturing in 2010. The move, however, is subject to favorable market conditions as the company has sufficient cash at the moment to service its debts.
The company’s objective is to partially repay and refinance its outstanding debts worth around P1.5 billion.
FPHC is aiming to reduce debt in the next two years using proceeds from asset sales. The company recently sold its stake in Manila North Tollways Corp. (MNTC), the operator of the North Luzon Expressway, to Metro Pacific Investments Corp. It will receive P6.2 billion from the sale.
Aside from trimming debt, FPHC might use proceeds from the asset disposition to fund its joint venture First Philec Electric Corp. with US-based SunPower Manufacturing Ltd. The venture operates a wafer-slicing plant at the First Philippine Industrial Park in Batangas that services the growing solar energy industry.
FPHC is also planning to use other proceeds to fund strategic acquisitions programmed this year up to 2011 as well as other capital and operating requirements.
FPHC, the holding firm for the power and manufacturing businesses of the Lopez family, expects flat growth for 2009 as it braces for more difficult times ahead.
In the nine months ending September last year, FPHC’s net income dropped 61 percent to P3.639 billion compared with P9.364 billion in the same period a year ago, weighed down by foreign exchange losses. Higher costs and expenses also offset higher revenues.