KKR exits First Gen, sells stake to Gateway-linked firm for P25.8B

Raphael Reyes/Rappler; First Gen images

Only a month before its exit, the private equity giant had been seeking to increase its First Gen stake and take the Lopez-led power company private, but the proposal was rejected

AT A GLANCE

• KKR has sold its entire 19.9% stake in First Gen Corporation for approximately P25.77 billion, following a failed attempt to increase its investment.
• The shares were sold to Angsana Finance Limited at P36 per share, which is higher than KKR's previous tender offer price of P35.
• The sale coincided with the resignation of Manolo Michael de Guzman from First Gen's board, who was linked to KKR's investment in the company.

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MANILA, Philippines – Global private equity investment giant KKR has exited First Gen Corporation, selling its entire 19.9% stake in the Lopez-led power company for about P25.77 billion, just weeks after an attempt to increase its investment and take First Gen private fell through.

In a regulatory filing, KKR-linked Valorous Asia Holdings said it disposed of 715.8 million First Gen shares on September 10 for P25.77 billion, equivalent to P36 per share. Valorous said the transaction included shares held indirectly through Philippines Clean Energy Holding Inc. and left it with no remaining stake in First Gen.

The buyer was Angsana Finance Limited, which separately disclosed that it had acquired the same 715.86 million shares, equivalent to 19.9% of First Gen’s outstanding common shares. Angsana is incorporated in the Cayman Islands and is wholly owned by Gateway Holdings Limited, the parent of emerging markets investment firm Gateway Partners. Gateway, which operates out of Singapore and Dubai, is already an investor in the Philippines as one of the backers of UNO Digital Bank.

Only a month earlier, KKR had sought to increase its stake in First Gen.

In August, First Philippine Holdings (FPH), First Gen’s parent company, rejected KKR’s non-binding proposal to purchase another 8.43% of the power company from FPH and launch a voluntary tender offer for First Gen’s entire public float at P35 per share. FPH said the proposed price did not represent First Gen’s “true value.”

Had the proposal pushed through, the tender offer would also have supported a potential voluntary delisting of First Gen from the Philippine Stock Exchange.

Now, KKR has instead sold its existing shares at P36 apiece, P1 higher than its proposed tender price.

The exit was also followed by a change in First Gen’s board. Manolo Michael de Guzman resigned as a director and member of the Board Risk Oversight Committee effective September 11. 

De Guzman is a senior adviser at KKR and president of Philippines Clean Energy Holding Inc., one of the vehicles through which KKR held its First Gen stake. His resignation came a day after KKR sold its entire stake, although First Gen did not state a reason for his departure. – Rappler.com