First Gen unit gets $420-M loan from several banks

MANILA, Philippines - A subsidiary of Lopez-led First Gen Corp. has secured a $420-million loan facility from several banks.

The long-term loan will allow First Gen to pay existing debts and fund a new power project, the company disclosed to the local bourse yesterday.

“FGP Corp., the owner of the 500-megawatt (MW) San Lorenzo natural gas-fired combined cycle power plant, signed a $420-million, 10-year term loan facility with seven banks,” First Gen said.

The loans will be availed from Bank of the Philippine Islands, BDO Unibank Inc., Philippine National Bank, Rizal Commercial Banking Corp., Security Bank Corp., The Hong Kong and Shanghai Banking Corp. and Union Bank of the Philippines.

FGP will repay its $77.4-million debts while proceeds from the refinancing will be used to pay down a portion of First Gen’s obligations, the company said.

As of end-June, First Gen posted $1.228 billion in total liabilities, down from $1.34 billion a year ago. Of these, $767.93 million were long-term debts, lower compared with $773.6 million last year.

“Aside from paying down debt at the First Gen level, the proceeds can be used to partly fund our growth plans including the 200 to 500-MW San Gabriel gas-fired project, which will begin construction next year and be completed in the 2014 to 2015 timeframe,” said Francis Giles Puno, president and chief operating officer of First Gen.

In August, First Gen announced that it is in talks with Meralco PowerGen Corp. for the San Gabriel power project.

First Gen has already developed an expertise in the natural gas-fired power plants.

In May, the company bought the remaining 40-percent stake of the British Gas Group in First Gas Holdings Corp. for $360 million. It includes the 40-percent share in FGP.

First Gen now fully owns and operates the 1,000-MW Santa Rita natural gas-fired power plant in Batangas.

To date, First Gen and its units have a gross generating capacity of 2,763 MW, of which 1,500 MW is natural gas, 1,129 MW is geothermal and 134 MW is hydropower. It accounts for 18 percent of the country’s total installed power generation capacity.