KKR Acquires Stake in Philippines Based Power Producer ‘First Gen’

KKR has accepted all of the 427,041,291 common shares of First Gen, representing approximately 11.9 percent of its outstanding common shares.

Global investment firm KKR has announced that, following the completion of the voluntary tender offer period by Valorous Asia Holdings, an entity owned by KKR investment funds, the Offeror has accepted all of the 427,041,291 common shares of First Gen Corporation that were tendered by shareholders at the close of the tender offer, representing approximately 11.9 percent of First Gen’s outstanding common shares.

First Gen is one of the Philippines’ largest independent power producers and is a subsidiary of First Philippine Holdings Corporation which is controlled by the Lopez family and is one of the most established conglomerates in the Philippines. 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.

Federico Lopez, Chairman and Chief Executive Officer of First Gen, said, “we welcome the news of KKR’s successful tender for First Gen shares and feel quite honoured 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 decarbonised future and we look forward to engaging with a world-class global investor, such as KKR, as we navigate the journey ahead as partners.”

The Offeror intends to acquire all of these tendered common shares at a price of USD 0.45 per common share on July 1, 2020, the cross date previously set out in the Offeror’s tender documents, representing a total investment value of USD 192.2 million.

David Luboff, Partner and Head of Asia Pacific Infrastructure at KKR, added, “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. 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.”

In April, we had reported that the Shapoorji Pallonji Group’s infrastructure development arm, Shapoorji Pallonji Infrastructure Capital (SP Infra) had entered into the definitive sale agreements with KKR for its 5 operational solar energy plants with a capacity of 317 MWp in consideration of about Rs 15,540 million. The company’s 5 solar assets portfolio having an aggregate capacity of 317 MW comprised of 169 MW (DC) in Maharashtra and 148 MW (DC) in Tamil Nadu.