KKR Acquires Stake in First Gen through Voluntary Tender Offer

Jun 29, 2020

Investment in leading independent power producer deepens KKR’s commitment to the Philippines

MANILA, Philippines –  Global investment firm KKR today announced that, following the completion of the voluntary tender offer period by Valorous Asia Holdings (the “Offeror”), an entity owned by KKR investment funds, the Offeror has accepted all of the 427,041,291 common shares of First Gen Corporation (PSE: FGEN) (First Gen) that were tendered by shareholders at the close of the tender offer, representing approximately 11.9% of First Gen’s outstanding common shares.

The Offeror intends to acquire all of these tendered common shares at a price of ₱22.50 (US$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 ₱9.6bn (US$192.2mm).

First Gen is one of the Philippines’ largest independent power producers and is a subsidiary of First Philippine Holdings Corporation. First Philippine Holdings is controlled by the Lopez family and is one of the most established conglomerates in the Philippines. First Gen 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% of the Philippines’ gross power generation in 2019.

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.”

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 honored 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 decarbonized future and we look forward to engaging with a world-class global investor, such as KKR, as we navigate the journey ahead as partners.”

Michael de Guzman, a Managing Director on KKR’s Infrastructure team, said, “We are very pleased with the result of this tender offer and are honored to be an investor in First Gen, a world-class infrastructure institution that plays a critical role in the lives of many Filipinos. KKR has now invested more than US$1 billion in the Philippines and we continue to look for new opportunities to support the country's growth trajectory, its leading companies and its families through our infrastructure, private equity, real estate, and credit investing businesses.”

Southeast Asia is a key part of KKR’s Asia infrastructure strategy, and KKR’s investment in First Gen extends the Firm’s track record as an active investor in Southeast Asia across asset classes. First Gen is additionally KKR’s third investment in the Philippines, following the Firm’s investments in Metro Pacific Hospitals, the country’s largest private hospitals operator and healthcare network, and in Voyager Innovations, a leading technology company.

KKR makes its investment from its Asia Pacific infrastructure strategy.

About KKR

KKR is a leading global investment firm that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate and credit, with strategic partners that manage hedge funds. KKR aims to generate attractive investment returns for its fund investors by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation with KKR portfolio companies. KKR invests its own capital alongside the capital it manages for fund investors and provides financing solutions and investment opportunities through its capital markets business. References to KKR's investments may include the activities of its sponsored funds. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR's website at www.kkr.com and on Twitter @KKR_Co.

About First Gen

First Gen is a leading independent power producer in the Philippines that primarily utilizes clean and indigenous fuels such as natural gas, geothermal energy from steam, hydro-electric, wind, and solar power. The Company has 3,492MW of installed capacity in its portfolio, which accounts for 21% of the country’s gross generation. First Gen is a subsidiary of First Philippine Holdings Corporation, one of the most established conglomerates in the Philippines, and has over 20 years of experience in power development. It is part of the Lopez Group of Companies.