KKR to raise stake in FGen

MANILA, Philippines — Global investment firm KKR & Co. Inc. plans to increase its stake in First Gen Corp. after its affiliate, Philippines Clean Energy Holding Inc. made a tender offer for  shares of the listed Lopez-led power firm.

Based on the tender offer report disclosed to the Philippine Stock Exchange, Philippines Clean Energy made an offer to acquire a minimum of 107.9 million to 205 million outstanding common shares from existing shareholders of First Gen for P33 apiece.

The shares to be acquired, which represent approximately three to 5.7 percent of First Gen, amount to a minimum of P3.56 billion to a maximum of P6.765 billion.

“The tender offer price represents a 16.61 percent premium over the last closing share price on Aug. 26 of P28.30, a 17.08 percent premium over the one-month volume weighted average price of the company’s common shares (VWAP) and 15.69 percent premium over the 12-month VWAP,” the report said.

Philippines Clean Energy’s tender offer will start at 9 a.m. today and end at 12 p.m. on Sept. 29.

The bidder made the tender offer for investment purposes, with plans to continuously review its investment in First Gen.

Philippines Clean Energy was incorporated under Philippine laws primarily as a holding company, and for the primary purpose of investing in, purchasing or otherwise acquiring and owning personal property, including shares of stock and other securities.

Its parent firm and controlling shareholder, Valorous Asia Holdings II Pte. Ltd., are managed and/or advised by Kohlberg Kravis Roberts & Co. L.P., which is in turn a subsidiary of KKR & Co. Inc.

Currently, KKR has a 12.59 percent stake in First Gen through Singaporean firm Valorous Asia Holdings Pte. Ltd.

In June last year, Valorous Asia Holdings acquired 11.9 percent of First Gen’s outstanding common shares after a successful P9.6 billion tender offer.

“In the event that the tender offer is successfully completed, the bidder may acquire common shares in an amount sufficient to allow KKR…to successfully nominate and elect a director to the board of the company,” the report read.

KKR, which is listed on the New York Stock Exchange, manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate and credit, with strategic partners that manage hedge funds.

First Gen is KKR’s first power investment in the country, having invested in Voyager in 2018 and in the hospital unit of Metro Pacific Investments Corp. in October 2019.

First Gen is a leading independent power producer in the Philippines that primarily utilizes clean and indigenous fuels such as natural gas, geothermal energy from steam, hydro-electric, wind, and solar power.

It has 3,495 megawatts of installed capacity in its portfolio, which accounts for 19 percent of the country’s gross generation.

First Gen is a subsidiary of listed First Philippine Holdings Corp., one of the most established conglomerates in the Philippines, and has over 20 years of experience in power development.