First Gen Corp. said on Tuesday that its board of directors had approved the increase in its authorized capital stock to P13.2 billion from P11.6 billion by creating redeemable preferred shares.
“The amendment to increase the authorized capital stock will give the Corporation increased financial flexibility to raise cash for its various projects and/or to pay debt,” it told the stock exchange.
It said the 160 million Series 1 shares to be created will have a par value of P1.00 each and has the following features: entitled to cumulative dividends, non-voting, non-participating, redeemable at the option of the corporation, and with a dividend rate to be determined by the board of directors.
The capital increase will be up for stockholders’ approval during the company’s annual general meeting on May 13, 2020.
First Gen also disclosed on Tuesday its board’s approval of the sale of its 100% stake in FGEN San Isidro Hydro Power Corp. to another subsidiary, FG Mindanao Renewables Corp. (FGMR), which will become the unit’s direct parent firm.
“FGMR is a 100% direct subsidiary of First Gen Mindanao Hydro Power Corp.,” which First Gen said has a hydropower service contract with the Department of Energy (DOE) for a proposed hydroelectric project to be located in Mindanao.
It said the restructuring will allow First Gen Mindanao Hydro to request the DoE for the assignment of the service contract to San Isidro, which will be its 100% indirect subsidiary.
San Isidro is not operational at present. It sale is valued at P25,000 or P1.00 for each of its share.
The transactions were approved by First Gen’s board on Feb. 10.
On Tuesday, shares in First Gen slipped by P0.150 or 0.71% to close at P20.85 each.