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UPDATE 1-Philippines' First Gen unit gets $544 mln loan

Tue, Nov 11 2008, 09:42 GMT
http://www.afxnews.com

MANILA, Nov 11 (Reuters) - First Gas Power Corp, a unit of Philippine power producer First Gen Corp, has secured a $544 million term loan from a consortium of foreign banks to repay its debt and that of its parent firm, despite tight credit conditions globally.

In a statement to Manila's stock exchange on Tuesday, First Gen said part of the loan would be used to repay its existing debt of $132 million. Another $215 million will go to First Gen to help it pay a significant portion of its maturing debts.

The rest will go to the local unit of UK gas firm BG Group , First Gen's partner in First Gas, according to Emmanuel Singson, vice president for finance at First Gen.

The loan consists of 10-year and 12.5-year maturities with the longer dated loan carrying a political risk cover.

"We secured some insurance for the banks against political risk," Singson told Reuters, adding the entire loan carried the usual project financing terms.

First Gen is the biggest privately owned power generator in the Philippines with an installed capacity of 2,582 megawatts, accounting for about 17 percent of the country's total installed capacity.

Last month, First Gen said it needed $700 million to refinance debts it incurred in its $1.35 billion purchase last year of 60 percent of geothermal power producer Energy Development Corp.

Federico Lopez, president and CEO of both First Gen and First Gas, said last month about $400 million of the debt was due in November and the rest in 2009.

Singson said the company intends to repay the $400 million debt this month -- most of which is owed to foreign banks -- with the help of proceeds from the sale of a 60 percent stake in a hydroelectric plant operator to EDC amounting to $105 million.

"We're in talks with the local banks on how to address their maturing obligations, but we intend to fully pay everything by November," he said.

Apart from the sale of the stake in the hydropower plant, First Gen also agreed last month to sell a 40 percent stake in unit Red Vulcan Holdings, which holds its 60 percent interest in EDC, to a consortium led by Japanese trading firm Marubeni Corp .

First Gas said the term loan was signed with nine banks, including Bank of Tokyo-Mitsubishi UFJ, ING Bank Singapore , Standard Chartered, Societe Generale , Malayan Banking Bhd and Kreditanstalt fuer Wiederbrau.

(Reporting by Manolo Serapio Jr, Editing by Ian Geoghegan) Keywords: FIRSTGEN/

(manolo.serapio@thomsonreuters.com; +632 841 8936; Reuters Messaging: manolo.serapio.reuters.com@reuters.net)

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