The First Gen Corp. will sell 31.5 percent of its subsidiary, Energy Development Corp. (EDC) to the consortium of investment fund managers of the Macquarie Infrastructure and Real Assets (MIRA) and Arran Investment Pte. Ltd. for P64.5 billion.
In a disclosure to the Philippine Stock Exchange, First Gen announced that they have entered into an implementation agreement with Philippines Renewable Energy Holdings Corp.
The latter, offered to buy 8.9 billion common shares of EDC for P7.25 each.
The offer represents around 23.5 to 31.7 percent of EDC’s total outstanding voting shares. This tender offer will run from August 10 (9AM) until Sept 18 (12NN).
“We recognize the value of shareholders’ investment in EDC. The tender offer presents an opportunity for EDC shareholders to realize their investment at a premium to the current share price. If successful, we look forward to forming a long term partnership with First Gen to bring our experience and expertise to EDC,” David Luboff, senior managing director of the Macquarie Infrastructure and Real Assets (MIRA) said.
First Gen subsidiary Nothern Terracota Power Corp will also participate in the offer by tendering 10.6 percent of their interest in EDC which will generate proceeds of P14 billion, First Gen and EDC Chairman Federico Lopez said.
Should the offer be successful, the transaction will leave First Gen with 40 percent economic state in EDC but will retain a 60 percent voting stake.
“Incoming investors wants the key management team to remain. Aside from being beneficial to us, the success of the tender offer is going to seal a strong partnership between First Gen with Macquarie and GIC,” Lopez said.