PRIME Infrastructure Capital Inc. has signed a share purchase agreement with First Gen Corp. to acquire a 60-percent stake in the latter’s natural gas power business for P50 billion.
In a disclosure, First Gen said the agreement covered equity in the 1,000-megawatt (MW) Santa Rita, 500-MW San Lorenzo, 450-MW San Gabriel and 97-MW Avion facilities.
The deal also includes the proposed 1,200-MW Santa Maria power plant and the Interim Offshore LNG Terminal.
The transaction will have to be approved by the Philippine Competition Commission and remains subject to certain conditions.
Under the agreement, Prime Infra will indirectly own 60 percent of the issued and outstanding capital stock of the said projects.
“First Gen will likewise be entitled to receive additional earnout amounts, subject to the fulfillment of certain conditions,” the company told the stock exchange.
First Gen has said that proceeds from the deal will be used for various capital expenditure requirements of the First Gen group.
It added that the transaction would enable the company to grow its gas and renewable energy portfolio.
First Gen is one of the country’s leading independent power producers, with a total installed capacity of 3,668 MW or about 18 percent of the Philippines’ gross power generation.
A subsidiary of First Philippine Holdings Corp. under the Lopez Group, First Gen primarily uses clean and indigenous fuels, such as natural gas, geothermal, hydroelectric, wind and solar power.
Prime Infra, meanwhile, is the infrastructure arm of the Razon group. Its portfolio includes Manila Water Company Inc., which supplies water to over 7.7 million people within its concession area, and Prime Energy, the current operator of the Malampaya deepwater gas-to-power project.
The acquisition marks a major consolidation in the Philippine energy sector and is seen as enhancing the country’s efforts toward energy security and transition to cleaner fuel sources.
First Gen shares rose 4 centavos, or 0.22 percent, to P18.10 on Wednesday amid a 1.89 percent drop for the benchmark Philippine Stock Exchange index.
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