Lopez-led FGen creates 160-million preferred shares, OKs sale of stake in hydro arm

By VG Cabuag & Lenie Lectura – February 12, 2020
from Business Mirror

THE board of Lopez-led First Gen Corp. (FGen) has approved the company’s increase in authorized capital stock after it created some 160 million in preferred shares, which it will use to raise cash. The board also approved the sale of its entire stake in a hydro subsidiary to another subsidiary.

In its disclosure, the company that owns the power assets of the Lopez group said it will increase its authorized capital stock to P13.2 billion from P11.6 billion after the creation of the said shares.

The new Series I preferred shares, with a par value of P1 per share, are entitled to cumulative dividends, non-voting, non-participating, redeemable at the option of the company and with a dividend rate to be determined by the board of directors.

This will be discussed for stockholders’ approval during the May 13, 2020 annual meeting.

“The amendment to increase the authorized capital stock will give the corporation increased financial flexibility to raise cash for its various projects and/or to pay debt,” it said.

San Isidro
Meanwhile, the board approved the sale of First Gen’s 100 percent stake in FGEN San Isidro Hydro Power Corporation to FG Mindanao Renewables Corp. (FGMR).

The sale will result in San Isidro being a 100-percent direct subsidiary of FG Mindanao.

FGMR is a 100 percent direct subsidiary of First Gen Mindanao Hydro Power Corp., which has a Hydropower Service Contract (HSC) with the Department of Energy (DOE) for a proposed hydroelectric project to be located in Mindanao.

“The restructuring will allow First Gen Mindanao Hydro Power Corp. to request the DOE for the assignment of the HSC to San Isidro, which will be its 100 percent indirect subsidiary,” it said.

FGen claims to be the largest clean and renewable Independent Power Producer in the Philippines, with a total installed capacity of 3,490 megawatts as of end 2018.

In 2016 it declared that it would not develop, finance, or operate any coal fired power plants.

Aside from hydro, First Gen power plants run on natural gas, geothermal, wind and solar. These plants have a combined capacity of 3,492 MW at the end of 2019.

FGen shares were last traded at P20.85 apiece.