A company called Philippines Clean Energy Holding Inc. on Friday expressed interest to acquire up to 5.7 percent First Gen Corp.
First Gen, the power unit of the Lopez Group, sought a one-day trading suspension of shares with the Philippine Stock Exchange following the publication of a notice from Philippines Clean Energy to acquire, through a public and voluntary tender offer, 3 percent to 5.7 percent of the total issued and outstanding common shares of the company.
“We have yet to receive the TO report. The request is being made to give the company’s shareholders equal access to the said information,” First Gen said in a disclosure Friday.
Philippines Clean Energy Holding is a new special purpose vehicle, with no known records in the power industry yet. The trading suspension of First Gen will be lifted Monday.
The board of Philippines Clean Energy announced it was planning to acquire 107.9 million to 205 million in issued and outstanding common shares, representing 3 percent to 5.7 percent of First Gen from shareholders. The offer is equivalent to a maximum of P5.8 billion based on First Gen’s closing price of P28.30.
Philippines Clean Energy said a tender offer was expected to be filed with the Securities and Exchange Commission and the Philippine Stock Exchange. The tender offer is expected to begin on Sept. 1.
Based on First Gen’s public ownership report as of June 30, First Philippine Holdings Corp. owns 67.8 percent of First Gen, Valorous Asia Holdings PTE LTD. holds 12.59 percent, while officers and control 0.86 percent. The public ownership stands at 18.74 percent.
First Gen is a leading independent power producer in the Philippines that primarily utilizes clean and indigenous fuels, such as natural gas, geothermal energy from steam, hydro-electric, wind and solar power.
The company has 3,495 megawatts of installed capacity in its portfolio, which accounts for 19 percent of the country’s gross generation.
First Gen ended the first half with P7.1 billion ($148 million) in recurring net income attributable to equity holders, up 11 percent from P6.7 billion ($132.9 million) in the same period last year.
Profits came from the operations of 3,495 megawatts of clean, low-carbon, and renewable portfolio.
First Gen benefited from higher electricity sales and prices, and lower interest expenses and taxes following the enactment of the Corporate Recovery and Tax Incentives for Enterprises Act.
“Power demand bounced back to pre-pandemic levels despite the limitations brought about by the persistently slow recovery of the economy,” First Gen president and chief operating officer Francis Giles Puno said earlier.
Puno said the power outages experienced in the second quarter highlighted the importance of keeping First Gen’s power portfolio properly maintained and running.
“We are steadily progressing with constructing the country’s first LNG [liquefied natural gas] terminal for delivery in fourth quarter 2022. We are also working to deliver more power projects across our portfolio despite the uncertainty surrounding the market and its accompanying business risks,” said Puno.
The natural gas platform delivered a 21-percent increase in recurring earnings in the first half to P5.2 billion ($107 million) from P4.5billion ($88 million) year-on-year.
The 97-MW Avion power plant enjoyed higher electricity sales as it supplied the grid with supplemental power during constraint periods while the other natural gas-fired plants reaped the benefits of lower income tax rates under the CREATE law.
First Gen said these were slightly offset by San Gabriel power plant’s lower generation because of repair work that was completed in the first quarter.
The gas platform’s attributable net income to parent increased to P5.2 billion (US$108 million) from P4.5 billion ($88 million) in the first semester last year.
Geothermal leader Energy Development Corp. contributed recurring attributable earnings from its geothermal, wind, and solar platform amounting to P2.3 billion ($47 million) as of June 30,, or 3 percent lower than P2.4 billion ($48 million) it earned year-on-year.
EDC incurred higher power plant and steam field maintenance expenses and foreign exchange losses, but these were offset by lower interest expenses and income taxes.
EDC’s attributable net income to parent of P2.2 billion ($46 million) in the first six months was unchanged compared to the same period in 2020.