First Gen says Prime Infra to buy 60% equity stake in gas units

First Gen says Prime Infra to buy 60% equity stake in gas units

Prime Infrastructure Capital (Prime Infra) is set to acquire a 60% equity stake in First Gen Corp.'s gas assets, marking a significant expansion for the company. The deal, valued at P50 billion, will see Prime Infra bolster its natural gas power production capabilities, making it a major player in the Philippine energy sector.

Enrique Razon Jr., the chair of Prime Infra, is spearheading the acquisition, which aims to transform the company into the leading natural gas power producer in the Philippines. The deal covers several key assets, including the 1,000MW Santa Rita, 500MW San Lorenzo, 450MW San Gabriel, 97MW Avion, and proposed 1,200MW Santa Maria power plants, as well as the Interim Offshore Liquefied Natural Gas Terminal [1].

The Lopez family, which continues to operate a robust portfolio of renewable energy assets, will retain a 40% stake in the gas business. This move is seen as a strategic move to unlock the value of First Gen's gas-related assets and refocus on being a pure renewable energy platform [1].

The acquisition is expected to bring significant benefits to the Philippine energy sector, potentially spurring more investment and enhancing energy security. Juan Paolo Colet, managing director at China Bank Capital, described the deal as a "game-changer" for Prime Infra and a positive development for the country [1].

The stock market reacted positively to the news, with shares of First Gen surging by as much as 33% on Monday after a temporary trading halt was lifted. The stock is currently trading at P20 per share, up about 21%, while parent firm First Philippine Holdings gained as much as 7.6% [1].

This acquisition is part of a broader trend of consolidation and expansion in the Philippine energy sector, driven by the need to enhance energy security and meet the growing demand for electricity.

References:
[1] https://insiderph.com/tycoon-razon-emerges-as-gas-power-kingpin-with-p50-b-first-gen-deal-lopez-stocks-surge