First Gen confident of selling shares in Red Vulcan in Q3

First Gen Corp., the power generation arm of the Lopez group, is confident it could dispose some of its shares in Red Vulcan Holdings Corp. in the third quarter this year.

First Philippine Holdings Corp. president Elpidio Ibañez said they also received several expression of interest for the shares.

FPHC owns 66 percent of First Gen, one of the country’s largest power generation companies.

“There are several groups that are interested and they’re going into their own due diligence process and they would go into their own fund-raising program and that really is what is going to take time,” Ibañez said.

Red Vulcan, 100 percent owned by First Gen, holds a material stake in PNOC Energy Development Corp. following the successful bidding for the PNOC-EDC shares conducted by the government in November last year. Red Vulcan owns a 60 percent stake in PNOC-EDC after offering the highest bid and paying in full P58.5 billion.

Earlier, First Gen commissioned US investment firm JP Morgan (S.E.A) Ltd. as financial advisor for the proposed sale of a portion of its equity stake in Red Vulcan.

“The proposed transaction will be by way of negotiated purchase , competitive bidding or any other means as may be agreed upon,” First Gen vice president Victor B. Santos Jr. said.

Early this year, First Gen acquired the 40 percent stake of Netherlands-based Spalmare Holding B.V., which paved the way for the company to own 100 percent of Red Vulcan.

Through its subsidiary Prime Terracota Holdings Corp., First Gen said it completed the full dilution of Spalmare, its minority partner in Red Vulcan. Spalmare is a joint venture between Icelandic sustainable energy firms Reykjavik Energy Invest hf (REI) and Geysir Green Energy ehf (GGE).

Among the assets of First Gen are the 1,000-megawatt (mw) Santa Rita and 500-mw San Lorenzo natural gas-fired power plants, the 225-mw Bauang medium-speed bunker-fired diesel power plant, the 112-mw Pantabangan-Masiway hydroelectric complex and the 1.6-mw Agusan mini-hydropower plant.

PNOC-EDC is currently the largest geothermal producer in the country with an installed capacity of 1,149.4 mw. This represents 60 percent of the country’s total geothermal capacity.