No deadline on BG deal, says First Gen

MANILA, Philippines – The Lopez Group said yesterday that it is not bound by a purported 60-day period to exercise its right of first refusal (ROFR) or any of its rights for that matter under the joint ventures with BG Energy Holdings.

In a statement, First Gen Corp. and its holding company First Philippine Holdings Corp. said they are not being subjected to a deadline with regard to the BG deal.

First Gen president Giles B. Puno said there is no truth to earlier reports that First Gen has until Nov. 29 this year to invoke a right of first refusal in the planned sale of BG Energy Holdings’ 40-percent equity in the First Gas assets to Korea Electric Power Corp. 

Puno said the right of first refusal provisions of the joint venture agreements with BG do not apply to BG’s proposed transaction and that the consent of FPHC, party to the joint venture agreement with BG, is required to complete the sale.

The First Gen chief explained that BG’s earlier disclosures to the [LSE and the NYSE] confirm that completion of the transaction is “subject to obtaining the necessary waivers and consents from First Philippine Holdings Corp.”

As such, First Gen and FPHC accordingly are not bound by any purported 60-day period to exercise its ROFR or any of its rights for that matter under the JVs with BG. 

Puno reiterated earlier statements made by First Gen that FPHC is evaluating all options available to it in respect of the proposed BG divestment, including whether or not to issue the requested waivers and consents or to acquire the BG stake itself based on pricing and terms mutually acceptable among the parties.

It will be recalled that Korea Electric Power Corp. (Kepco) has bought 40-percent stake of BG Group’s in the natural gas power plants of First Gen of the Lopezes for $400 million.

First Gen reiterated that it has yet to approve the entry of Kepco in the 1,500- megawatt (MW) Sta. Rita and San Lorenzo power plant projects.

First Philippine Holdings Corp. (FPHC) and First Gen own the remaining 60 percent stake in the gas power plants.

The Lopez power firms said they were informed that the $400-million net consideration offered by Kepco is “subject to standard completion adjustments, including interest to be paid to BG Group upon closing which is expected in the first quarter.”

“First Philippine Holdings and First Gen are evaluating their rights and options in respect to BG’s contemplated divestment of its interests in Sta. Rita and San Lorenzo,” the companies said.

Earlier, First Gen said it may not be able to join forces with Kepco as this may result in some legal issues.