MANILA, Philippines - First Gen Corp. is now the full owner of the Sta. Rita and San Lorenzo natural gas-fired power plants in Batangas after buying out its British partner for $360 million.
The power generation firm of the Lopez Group, through subsidiary Blue Vulcan Holdings Corp. (BVHC), acquired yesterday from BG Group member BG Asia Pacific Holdings Pte. Ltd. (BGAPH) the entire outstanding capital stock of Lisbon Star Management Ltd. (LSML).
“The net consideration paid by BVHC to BGAPH for the LSML shares was $360 million,” First Gen said in a statement.
“Following the acquisition of LSML, First Gen will beneficially own 100 percent of the Sta. Rita and San Lorenzo power projects,” it added.
LSML is a company registered in the British Virgin Islands. Its Philippine subsidiaries, BG Consolidated Holdings (Philippines) Inc. and BG Philippines Holdings Inc., own 40 percent of First Gas Holdings Corp.
First Gas owns and operates the 1,000-megawatt (MW) Sta. Rita combined-cycle natural gas-fired power plant and the 500-MW San Lorenzo natural gas power plant.
The 40-percent stake of BG Group, which is publicly listed on the London and New York Stock Exchange, was worth $400 million in 2010. The remaining 60 percent is owned by First Gen.
“This transaction increases First Gen’s attributable ownership by 600 MW to 2,144 MW and does not affect our ability to grow under the legal limits imposed by the Electric Power Industry Reform Act,” said First Gen chairman and chief executive Federico R. Lopez.
First Gen will fund the buyout through loans, internal cash and the proceeds of the P10 billion worth of preferred shares sold early this month.
To date, First Gen and its units have a gross generating capacity of 2,763 MW, of which 1,500 MW is natural gas, 1,129 MW is geothermal and 134 MW is hydropower. The company accounts for 18 percent of the country’s total installed power generation capacity.
Its net attributable capacity has increased to 2,144 MW from 1,544 MW with the conclusion of the buyout and can still expand its generating capacity by another 1,700 MW without exceeding the government-mandated cap.
“Sta. Rita and San Lorenzo continue to perform reliably and have delivered consistent returns since the start of their commercial operations in 2000 and 2002, respectively,” Lopez said.
First Gen has a total of 15 power plants powered by indigenous fuel, namely, natural gas, geothermal steam and hydropower.
First Gen posted a 171-percent jump in profits to $52.1 million in the first quarter from $19.2 million a year ago.
The company is targeting to triple its earnings this year, from $35 million last year.