January 21, 2015

FGEN raises P7.5b from private placement

In a disclosure released today, First Gen announced it completed a P7.5b private placement at P25.25/sh, reflecting a 2.9% discount to the last traded price of P26/sh. A total of 297,029,800 common shares were sold, of which 179,127,900 were taken out of treasury and 17,623,100 from FGEN’s unissued capital stock.

Parent First Philippine Holdings Corp (FPH), which owns majority of FGEN, subscribed to its pro rata share in the transaction, thereby retaining its ownership in FGEN at 66.2%. FPH bought a total of 196.751m common shares worth P4.97b.

Our take: Proceeds from the deal will be used to finance the company’s growth projects, thereby limiting the potential EPS dilution to existing shareholders. With the transaction, we estimate FGEN’s outstanding shares will increase to 3,661m from 3,363m common shares, resulting in a potential 9% dilution in EPS. Two of these expansion projects are currently under development and should start contributing to profits in 2015 (100 MW Avion) and 2016 (414 MW San Gabriel). – WealthSec