MANILA BULLETIN: First Gen pays P1.25 billion for EDC call option
April 28, 2010

First Gen Corporation paid P1.25 billion to three firms controlled by businessman Eusebio Tangco under call option agreements to buy additional shares in geothermal power unit Energy Development Corporation.

In a disclosure to the Philippine Stock Exchange (PSE) Monday, First Gen said the option consideration was paid upon execution of the agreements.

It added that, with the agreements were signed with Philplans First Inc., Rescom Developers Inc. and Philhealthcare Inc. and Systems Technology Institute Inc., First Gen has been appointed as proxy to vote the option shares in all stockholders’ meetings.

The agreements grant First Gen call options for the purchase of 585 million EDC shares equivalent to 3.12 percent of EDC for a period of three years or up to April 2013.

Under the terms of the agreements, First Gen will be entitled to exercise its call option over the EDC shares at the exercise price of P5.67 per share for the first year, P6.19 per share for the second year and P6.76 for the third year.

If exercised in full by First Gen, the transactions will be worth P3.32 billion in the first year, P3.62 billion in the second year, and P3.95 billion in the third year.

First Gen is on buying mode after its parent company First Philippine Holdings Corporation raising P22.41 billion from the sale of an additional 6.6 percent of Manila Electric Company last month to Beacon Electric Asset Holdings, Inc., a unit of Metro Pacific Investments Corporation.

The sale consisted of 74.7 million Meralco shares at P300 per share.

“With the additional resources we can continue to take advantage of other opportunities in the power and energy sector, with the end in view of maximizing value for all our stakeholders,” said FPHC chairman Oscar M. Lopez.

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