First Holdings to spend over P3B to trim debts

MANILA, Philippines - Lopez-led First Philippine Holdings Corp. (FPHC) will spend more than P3 billion to trim its liabilities, the company told the local bourse yesterday.

The holding firm’s board of directors approved the purchase of all existing Series B preferred shares and the payment of fixed-rate corporate notes ahead of maturity.

“The board approved the prepayment of the remaining fixed-rate corporate notes in the amount of P3.18 billion,” FPHC said.

In October 2011, FPHC raised P4.8 billion by issuing seven-year corporate notes to repay debts maturing in 2012 and 2014 as it extends the loan maturity timetables and smoothen out repayment schedules.

The board of directors also approved “the exercise by FPHC of the option to redeem all of its outstanding 43 million Series B preferred shares,” the holding firm said.

In April 2008, FPHC listed 43 million Series B perpetual preferred shares in the stock exchange. The dividend rates for the shares were pegged at 8.7231 percent for five years from listing date, with dividends payable in arrears semi-annually.

FPHC issued the preferred shares to repay outstanding debts, fund strategic business acquisitions, and finance capital and operation requirements.

Under the terms of the issuance, it has the option to redeem all of the outstanding Series B preferred shares starting on the fifth anniversary of the issue date, FPHC said.

FPHC paid P95.9 million and P187.5 million in dividends for the preferred shares in 2008 and 2009, respectively.

As of end-September last year, the holding firm had P3.588 billion long-term debts and P2.987-billion outstanding  bonds.

FPHC, through its power generating units, is looking at increasing its capacity by 400-500 megawatts (MW) in the next two to three years.

Current capacity of the company is 2,800 MW through geothermal firm Energy Development Corp. and renewable energy firm First Gen Corp. But only 1,500 MW is attributable to FPHC.

FPHC also holds shares in Manila Electric Co., Rockwell Land Corp. and solar wafer slicing firm First Philec Nexolon Corp.

Its profits surged to P11.62 billion in the nine months ending in September last year from P637 million a year ago partly due to a P1.66-billion gain from a one-time real estate sale.

Revenues rose 14 percent to P59.308 billion from P52.01 billion due to higher earnings of its operating units.