First Gen sets par­tial buy­back of $300-M 10-year bonds

The Philippine Star - - BUSINESS - DANESSA RIVERA

Lopez-led First Gen Corp. is par­tially buy­ing back its 10-year bonds listed at the Sin­ga­pore Ex­change Se­cu­ri­ties Trad­ing Ltd. (SGX) to bring down its debt level.

The com­pany dis­closed yes­ter­day it has de­cided to pur­chase some of the SGX-listed $300 mil­lion, 6.5 per­cent fixed rate notes due 2023 from the mar­ket.

“As part of First Gen’s debt re­duc­tion plan, we pur­chased some of its US dol­lar bonds listed in the Sin­ga­pore Ex­change,” chief fi­nance of­fi­cer Em­manuel Sing­son said.

The com­pany, how­ever, de­clined to dis­close the amount pur­chased from the mar­ket.

In Oc­to­ber 2013, First Gen raised $300 mil­lion through a 10-year, non-call se­nior un­se­cured bond to fi­nance in­vest­ments in power projects and gen­eral cor­po­rate pur­poses.

The com­pany was then build­ing the San Gabriel project, lo­cated ad­ja­cent to its ex­ist­ing power plants in Batan­gas, namely the 1,000-megawatt (MW) Sta. Rita and 500-MW San Lorenzo gas plants. The San Gabriel plant started com- mer­cial op­er­a­tions late 2016.

First Gen re­cently sold 31.7 per­cent of its stake in En­ergy De­vel­op­ment Corp. (EDC) to Philip­pines Re­new­able En­ergy Holdings Corp. (PREHC) – the con­sor­tium of in­vest­ment fund man­agers man­aged by Mac­quarie In­fra­struc­ture and Real As­sets (MIRA) and Ar­ran In­vest­ment Pte Ltd. of Sin­ga­pore-based GIC – for apity prox­i­mately $1.3 bil­lion.

Of the to­tal, First Gen and its sub­sidiary North­ern Tere­co­nomic racota Power Corp. gen­er­ated pro­ceeds of around $280 mil­lion or P14 bil­lion.

Un­der the new part­ner­ship, First Gen con­tin­ues to hold a ma­jorstake in EDC, main­tain­ing day-to-day con­trol of the com­pany. The trans­ac­tion will leave First Gen with a 40 per­cent stake in EDC but will re­tain a 60 per­cent vot­ing stake.

First Gen and EDC chair­man Fed­erico Lopez ear­lier said pro­ceeds would flow back to par­ent firm First Gen, which in­tends to use it “to re­duce debt and also use it for growth.”

In the first half of the year, First Gen reg­is­tered a re­cur­ring in­come of $84 mil­lion, four per­cent lower ver­sus last year’s $87 mil­lion on lower dis­patch of its mer­chant power plants.

The firm said it was able to nar­row the de­cline quar­teron-quar­ter since its mer­chant power plants par­tially re­cov­ered from the losses re­ported in the first quar­ter with higher elec­tric­ity prices at the Whole­sale Elec­tric­ity Spot Mar­ket (WESM) in the sec­ond quar­ter.

Mean­while, at­trib­ut­able net in­come de­clined 48.7 per­cent from $113.1 mil­lion to $58 mil­lion due to a drop in con­tri­bu­tions from its sub­sidiaries.

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