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POWER-generation giant First Gen Corp. is confident
that it would be able to pay off its $400-million
maturing debt next month considering the number of
options it has under its sleeves.
“Even if
the Santa Rita refinancing does not, we still have a
number of alternatives to pay off that maturing debt,”
Federico Lopez, First Gen president and chief executive,
said at the sidelines of the Management Association of
the Philippines International CEO Conference.
The
First Gen official, however, admitted that the
refinancing of the Santa Rita facility owned by
subsidiary First Gas Power Corp. is their primary option
to pay off their outstanding debt.
He
pointed out that the bulk of First Gen’s debts are made
under the holding company and are short-term
obligations. The official added that operating companies
have been successful in paying off debts over the years.
Lopez
said having paid off debts over the years has given
First Gen enough elbow room to borrow money. “So there’s
a lot of debt capacity, and it’s just a matter of
putting things together in the right place,” he said.
Among
its many options, Lopez pointed out the interests
expressed by investors in some of their assets such as
the 112-megawatt Pantabangan-Masiway hydroelectric
complex.
The
company is also trying to sell 40 percent of another
operating company, Red Vulcan Holdings Corp., to raise
proceeds for debt repayment. The firm acquired the
40-percent economic interest in Energy Development Corp.
(EDC) last year through Red Vulcan.
First
Gen is now in talks with three potential investors for a
buy-in. Reports have it that First Gen may sell its
stake in Red Vulcan to generate between $158 million and
$306 million. But industry punters say this may cause a
bit of a problem as EDC now trades at P3.70, way below
2007 acquisition cost of P9.74 per share. |
