First Gen narrows IPO price range to P51-P62

First Generation Holdings Corp., the holding firm of the Lopez family’s power and energy-related businesses, has narrowed the price range for its planned initial public offering (IPO) to P51-P62 from P51-74 per share.

The company did not say why it reduced the price range for its IPO shares, but it still expects to generate P11.2 billion which will be used for the expansion of existing facilities and planned acquisitions. The offer price will be finalized on Jan. 27, 2006.

Philippine Stock Exchange president Francis Lim said the reduction of the price range does not mean there is a low demand for the shares but rather First Gen wanted to give the investing public a fair chance to invest in the holding firm. "This is a good come-on for the investing public. Even before they decided to lower the price range, we at the PSE already tried to talk them into it," Lim said.

The international offering started yesterday and will run until Jan. 26. Shares are now being offered in Hong Kong, Singapore, London, and New York.

The domestic offering, on the other hand, is tentatively scheduled from Jan. 30 to Feb. 3, 2006. Listing has been set on Feb. 10.

The primary offering involves 180.9 million shares to 219.3 million shares while the secondary offering involves 125 million shares.

Tapped as global coordinator and bookrunner for the issue is Credit Lyonnaise SA while BDO Capital & Investment Corp. and ATR Kim Eng Capital will serve as lead manager for the domestic offer.

Proceeds from the offering will be used for investments in capacity expansion, which may include both potential acquisitions of power generation facilities and the development of greenfield projects as well as for general corporate purposes, including working capital and investments.

The book value of the company, based on its unaudited financial statements as of June 30, 2005, was P13.52 billion or P29.90 per share. The book value represents the amount of the company’s total assets less the sum of its liabilities less the equity of the outstanding value per share.

Once listed, First Gen will be the fifth company owned or controlled by the Lopez family that will be traded on the exchange next to power utility giant Manila Electric Co. (Meralco), ABS-CBN Broadcasting Corp., Benpres Holdings Corp. and FPHC.

First Gen plans to put up a new 550-megawatt combined cycle, gas-fired plant on the land adjacent to its Sta. Rita and San Lorenzo plants.

Other plans include the development of downstream natural gas transmission and distribution facilities and the development of fuel-related services which may include liquefied natural gas import terminals, fuel tanker chartering and oil pipeline management.