First Gen shares soar on KKR unit’s offer

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By Adam J. Ang

FIRST Gen Corp.’s (First Gen)shares surged upon trading resumption on Wednesday, a day after a Singaporean firm submitted to regulators its tender offer to buy almost a tenth of the Lopez-led energy company’s stocks.

The energy firm told the Philippine Stock Exchange, Tuesday, that Valorous Asia Holdings Pte. Ltd., a unit of KKR Asia Pacific Infrastructure Holdings Pte. Ltd., intends to purchase around 6%-9% of its total issued and outstanding common shares.

On May 27, shares in the company rose by P2.51 or 14.15% to close at P20.25 apiece.

“[First Gen] shares surged today after the company Valorous made an offer to acquire as much as 9% [shares] of the company at P22.50 [each],” Luis A. Limlingan, head of sales at Regina Capital Development Corp., said in a Viber message.


He said the tender offer represents more than a 25% premium over the company’s last traded price on May 22 at P17.74.

First Gen requested a one-day trading suspension on May 26 to give way for the equal dissemination of information on the offer, as well as to protect its stock price.

KKR Asia Pacific Infrastructure is owned by KKR Asia Pacific Infrastructure Investors SCSp based in Luxembourg. The latter is managed and advised by Kohlberg Kravis Roberts & Co. L.P., a unit of New York-listed investment firm KKR & Co., Inc.

In an interview with BusinessWorld, a KKR official said the all-cash offer could bring immediate return on shareholders’ investments at an “attractive” premium.

“KKR has made this tender offer in good faith and would welcome the opportunity to be a minority investor available to positively engage with First Gen’s management team and the Lopez family as helpful in the future,” KKR Asia Pacific Infrastructure Head David Simon Luboff said.

The tender offer commenced on Wednesday and will end on June 24, which period can be extended upon approval from the Securities and Exchange Commission.

KKR has actively invested in the hospital arm of Metro Pacific Investment Corp. and Voyager Innovations, Inc., a unit of PLDT, Inc.

FGen LNG Corp., a unit of First Gen, is among companies that submitted proposals to build regasification facilities for imported liquefied natural gas (LNG).

On March 4, it filed with the Department of Energy (DoE) an application for a regulatory permit for the construction of its offshore terminal for LNG within First Gen’s energy complex in Batangas City.

The project, once completed, will bring in an interim floating storage and regasification unit (FSRU), which will hasten the introduction of the imported fuel to the Philippines. The country has yet to enter any LNG supply contracts from overseas producers.

Publicly listed First Gen had said that upon the issuance of a regulatory permit, it might start the project as early as this month so it could receive imported LNG by the third quarter of 2022.

Due to the prevailing public health crisis spurred by the global pandemic, the company expects the permit to come in later. FGen LNG has been preparing to build its LNG terminal, which could happen soon after the crisis subsides and when conditions would allow construction activities to be done safely.

The DoE earlier declared First Gen’s LNG terminal as an “Energy Project of National Significance” under Executive Order No. 30, allowing it to enjoy faster processing of permits from government agencies.