First Gen unit hikes capital to get perks

LOPEZ-LED First Gen Hydro Power Corp. has secured the nod of the Securities and Exchange Commission to boost its authorized capital stock to P1.93 billion from P1 million, to get tax perks from the Board of Investments (BoI). Parent First Gen Corp. had earlier agreed to buy 482.75 million shares for P482.75 million and an additional paid-up capital of P1.45 billion in its wholly owned subsidiary. The new authorized capital will consist of 1.2 billion common shares and 731 million preferred redeemable shares with a par value of P1 apiece. A company source, who requested anonymity, told BusinessWorld the company needed to raise capitalization to qualify for tax holidays as a BoI "pioneer" enterprise. "This is part of the firm’s registration as a pioneer enterprise. Clean and renewable projects are entitled to BoI incentives. We have to conform with the BoI requirements," the source said. First Gen Hydro has commissioned VA Tech Hydro for major refurbishment and upgrade works at the 100-megawatt (MW) Pantabangan hydroelectric power plant, the first major power plant of the National Power Corp. sold by the Power Sector Assets and Liabilities Management Corp. (PSALM). First Gen said the refurbishment and upgrade project signals the implementation of the initial phase of First Gen Hydro’s expansion program that includes investing in additional units for each of the Pantabangan and Masiway hydroelectric power plants to increase their combined capacity by 78 MW. The Pantabangan-Masiway expansion program is in line with First Gen’s vision to "be a world-class energy provider and to provide clean and reliable energy for the Philippines." A global supplier of turnkey electromechanical equipment for hydro power plants, Austria-based VA Tech Hydro is engaged in the construction of new hydroelectric power stations and the rehabilitation and upgrade of existing plants. Completed in 1977, the Pantabangan power plant has been in service for more than 30 years without having undergone a major overhaul. The refurbishment and upgrade project will extend the life of the power plant by an additional 25 years, and improve plant efficiency and performance by increasing capacity by approximately 18 MW. The project involves refurbishing the machines one year apart, with the first unit scheduled between July and December 2009, and the second unit expected to be completed by December 2010. — Ruby Anne M. Rubio, BusinessWorld