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US investment firm KKR buys P9.6-b stake in FGen

American investment firm KKR through subsidiary Valorous Asia Holdings acquired an 11.9-percent equity stake in First Gen Corp. for P9.6 billion through a tender offer.

KRR said in a statement that after the completion of the voluntary tender offer, Valorous accepted all the 427,041,291 common shares of First Gen that were sold by shareholders at the close of the tender offer, representing 11.9 percent.

Valorous said it intended to acquire all the tendered common shares at a price of P22.50 ($0.45) per common share on July 1, the cross date previously set out in the tender documents, representing a total investment value of P9.6 billion ($192.2 million).

“We are thrilled to make this infrastructure investment in the Philippines in First Gen. We have long viewed First Gen as an exceptional business with a high-caliber leadership team, and we have great respect for the Lopez family for building this strong, well-established company,” said David Luboff, partner and head of Asia Pacific infrastructure at KKR.

“This is an exciting and further milestone for KKR’s Asia Pacific infrastructure business, and we are pleased to have this opportunity to be an investor in First Gen able to positively engage with the company’s management team and the Lopez family as helpful in the future,” said Luboff.

First Gen is one of the Philippines’ largest independent power producers and is a subsidiary of First Philippine Holdings Corp. controlled by the Lopez family.

The company primarily generates power through renewable energy and indigenous fuel sources such as natural gas, geothermal energy from steam, hydro-electric, wind and solar power.

First Gen has 3,492 megawatts of installed capacity in its portfolio, which accounted for 21 percent of the Philippines’ gross power generation in 2019.

“We welcome the news of KKR’s successful tender for First Gen shares and feel quite honored of the confidence they have in our country, our company, our management and the strategic choices we’ve made toward clean energy. It’s especially exciting given the accelerating transition we all need to make toward a decarbonized future and we look forward to engaging with a world class global investor, such as KKR, as we navigate the journey ahead as partners,” said First Gen chairman and chief executive Federico Lopez.

Michael de Guzman, KRR managing director on KKR’s Infrastructure team, said the investment firm invested more than $1 billion in the Philippines.

“We continue to look for new opportunities to support the country’s growth trajectory, its leading companies and its families through our infrastructure, private equity, real estate and credit investing businesses,” de Guzman said.

First Gen is KKR’s third investment in the Philippines, following its investments in Metro Pacific Hospitals, the country’s largest private hospitals operator and healthcare network and in Voyager Innovations, a leading technology company.

Topics: KKR , Valorous Asia Holdings , First Gen Corp.
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