First Gen, Prime Infrastructure ink P50 billion share purchase deal

MANILA, Philippines —  Razon-led Prime Infrastructure Capital Inc. and the Lopez Group’s First Gen Corp. have moved a step closer to sealing a P50-billion gas deal with the signing of a share purchase agreement (SPA).

First Gen said in a stock exchange filing yesterday that it executed the SPA for Prime Infra’s planned takeover of its gas business.

The deal, first reported in May, covers First Gen’s four existing gas-fired facilities totaling over 2,000 megawatts, a proposed 1,200-MW gas plant and an interim offshore liquefied natural gas (LNG) terminal in Batangas.

First Gen said Prime Infra has agreed to pay P50 billion for the assets upon the transaction’s closing.

The Lopez firm will also be entitled to receive additional earnout amounts, subject to fulfillment of certain conditions.

After the transaction, Prime Infra will own 60 percent of the gas assets, with First Gen retaining a 40-percent interest to ensure continuity and stable operations of the projects.

Prime Infra will likewise take a commanding 60-percent stake in the LNG terminal, while First Gen and Japan’s Tokyo Gas will each hold 20 percent.

The multibillion-peso proceeds from this deal are expected to ignite First Gen’s aggressive push into renewable energy.

The company’s portfolio currently includes over 1,600 MW of capacity from solar, wind, geothermal and hydropower plants.

At the same time, the strategic partnership will help position Prime Infra as the dominant natural gas player in the Philippines.

The Malampaya gas field, located offshore Palawan and operated by Prime Infra subsidiary Prime Energy Resources Development, has long fueled First Gen’s Batangas plants.

Market watchers were expecting the Razon-Lopez deal to challenge the $3-billion LNG venture sealed in January by Pangilinan-led Meralco PowerGen Corp., Ang-led San Miguel Global Power and Aboitiz Power Corp.