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MANILA - First Gen Corp. expects full ownership of two natural gas power plants in Batangas to add $50 million to its annual revenues.
But since the acquisition of the British Gas Group's stake was concluded last month, the contribution this year may be no more than $30 million, Frederico Lopez, First Gen chairman, said.
On Wednesday, First Gen, through wholly-owned subsidiary Blue Vulcan Holdings Corp., bought out the 40-percent stake of the BG Group in the 1,000-megawatt Sta. Rita and 500-megawatt San Lorenzo natural gas plants for $360 million.
First Gen financed bulk of the acquisition with the proceeds of the recently issued P10-billion Series "G" perpetual preferred share offering.
While the increased ownership in the two natural gas plants boosted the company's generation capacity by 600 megawatts to 2,144 megawatts, it will prompt its parent First Philippine Holdings Corp. to reassess its target of adding 400 to 500 megawatts of capacity in the next two to three years.
"Now that a major part will go to the purchase then we have to look again at our balance sheet, our cash flows. We don't know what's going to happen in Europe. We've seen some euro banks pulling out of Asia so financing could be a challenge," said Elpidio Ibanez, First Holdings president and chief operating officer.
Ibanez said it may not be the best time to sell shares because its shares remain "undervalued."
On Friday, First Holdings shares lost 1.53 percent to close at P70.60 apiece, while First Gen shares dropped 3.28 percent to settle at P15.90 each.
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