First Gen hiking capital to P13.2 billion

MANILA, Philippines — Lopez-led First Gen Corp. has received the green light from its shareholders to raise its authorized capital to P13.2 billion as part of efforts to improve financial flexibility to develop its pipeline of projects.

“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,” First Gen said in a disclosure to the Philippine Stock Exchange.

The capital increase will be done through the creation of 160 million Series I preferred shares with a par value of P1 per share. The preferred shares are entitled to cumulative dividends, non-voting, non-participating, redeemable at the option of the corporation, and with a dividend rate to be determined by the board of directors.

During its annual stockholders’ meeting earlier this week, First Gen announced plans to spend at least P14 billion next year to develop its liquefied natural gas (LNG) terminal, push for renewable energy projects and undertake life extension programs for its gas-fired power plants in Batangas.

These projects are part of the Lopez group’s commitment to move to a decarbonized and regenerative future, First Gen chairman and chief executive officer Federico Lopez said.

“This year we crystallized our mission at (First Philippine Holdings) and our group of companies and that is to forge collaborative pathways for a decarbonized and regenerative future. It’s a deliberately high bar and we’re nothing short of humbled by it. But we expect this short phrase to be the beacon that guides us through this turbulent decade and beyond,” he said.

First Gen president and chief operating officer Giles Puno said the largest capital expenditure will go to the LNG terminal amounting to $110 million or roughly P5.4 billion to introduce reliable, flexible, and cost-competitive LNG to the country by 2022.

So far, the company has spent $60 million of the $200-$400 million total project cost of the LNG terminal.

The LNG terminal will begin construction with a floating storage and regassification unit (FSRU) to be on track of its target to bring LNG into the country by the third quarter of 2022.

An FSRU is a LNG carrier that is capable of storing LNG and which has an onboard regasification plant capable of returning LNG into a gaseous state and then supplying it directly into the gas network.

First Gen is also spending $18.3 million for its gas-fired power plants next year, which cover the provision of shelter-in-place housing, plant enhancements and life extension programs.

Meanwhile, First Gen subsidiary Energy Development Corp. will stick to its annual capex of P7-8 billion next year.

First Gen owns and operates 30 power plants across Luzon, Visayas, and Mindanao with 3,492 megawatts of installed capacity, powering 21 percent of the Philippines’ gross generation as of the end of 2019.