First Gen Subsidiary Refinances Debt

MANILA, Philippines - FGP Corp., a subsidiary of the Lopez-owned First Gen Corporation, has inked a $420-million loan facility with seven banks to refinance existing debts. The loan which has a 10-year tenor was closed with the Bank of the Philippine Islands, BDO Unibank, Hong Kong and Shanghai Banking Corporation, Philippine National Bank, Rizal Commercial Banking Corporation, Security Bank and Union Bank of the Philippines. First Gen has stated in its disclosure to the Philippine Stock Exchange (PSE) that "the proceeds of the loan will be used to repay the existing debt of FGP in the amount of $77.4 million." FGP Corp. is the corporate vehicle subsidiary which developed and owner of the 500-megawatt San Lorenzo natural gas-fired project in Batangas. The remainder of the borrowings, it was noted, "will be used to pay down a portion of First Gen Corporation's debts." It made reference to the company's purchase of the 40-percent stake previously held by British Gas in the First Gas power plants. First Gen president and chief operating officer Francis Giles B. Puno has emphasized that "aside from paying down debt at First Gen level, the proceeds can be used to partly fund our growth plans." Primary in its lineup of expansion ventures will be its proposed San Gabriel power project with planned capacity of 200 to 500 megawatts. Puno said the facility, which shall serve as the third gas-fed asset for the company, "will begin construction next year and be completed in the 2014-2015 timeframe." The Lopez group is among the power industry players with grand aspirations for expansion. Its blueprint would command huge investment of up to $3.0 billion. Beyond the capacity additions at First Gen's portfolio, its affiliate Energy Development Corporation (EDC) is similarly on expansion mode - for geothermal and other renewable energy sources, like wind and hydro. First Gen noted that its current generation portfolio stands at 2,763 megawatts and that accounts for approximately 18-percent of the national grid capacity. With a market share limit of 25-percent, it still has a room for capacity addition of 7.0-percent of the national installed capacity