First Gen inks $100-M notes facility with BDO

MANILA, Philippines - First Gen Corp., the power generation unit of the Lopez Group, said it has signed a $100-million notes facility agreement with Banco de Oro Unibank Inc. (BDO) to raise funding for its investment program, capital requirements and growth initiatives in 2011.

In a disclosure to the Philippine Stock Exchange yesterday, the company said it has also tapped BDO Capital and Investment Corp. as arranger for the loan facility.

The facility will be equally divided in two tranches:

The Tranche A facility will have a tenor of six years from the issue date and a grace period for principal repayment of 24 months, while the Tranche B facility has a tenor of seven years from issue date and a grace period for principal repayment of 36 months.

Earlier, First Gen said it is studying the possibility of issuing P7 billion worth of new shares early next year to finance its capital expenses, including its planned purchase of British Gas’ stake in subsidiary First Gas Corp.

“We’re looking at issuing perpetual preferred shares, we’re hoping anywhere from P5 billion to P7 billion in preferred shares. That’s for acquisitions and investments, if we’re able to acquire the BG stake then that’ll partly fund the transaction,” said Francis Giles Puno, First Gen president.

The BG Group is selling its 40-percent stake in the 1,000 megawatt Sta. Rita and 500-MW San Lorenzo gas-fired power plants which it co-owns with the Lopezes.

Unified Holdings Corp., a subsidiary of First Gen, currently owns 60 percent of First Gas Power Corp. which financed, constructed and operates the San Lorenzo combined-cycle natural gas-fired power plant. BG, on the other hand, owns the remaining 40 percent of First Gas.

Puno said a portion of the proceeds from the shares issuance will also be used to fund its refinancing requirement for 2011 and other investments.

“We have some refinancing next year, potentially for the convertible bond, that’s in February and then potentially other investments,” he said.

 According to Puno, they would also need funds for Energy Development Corp. (EDC), another subsidiary of First Gen.

“We also, have a call option on EDC shares so we have to fund that also. Hopefully, we’’ll do that by March next year,” he said.