First Gen rules out EDC sale, keeps renewable investment plan in focus

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First Gen rules out EDC sale

Highlights

First Gen confirms in a stock exchange filing that it has no plans to sell its geothermal unit Energy Development Corp despite acquisition interest.
Indonesian energy firm PT Barito Renewables submitted a non-binding offer of about $5 billion for EDC in mid-July, but no agreement has been reached.
First Gen will allocate up to 160 billion Philippine pesos ($2.55 billion) over five years for renewable projects, while its shares fell as much as 4.3% and PT Barito Renewables dropped 2.2%.

Filing clarifies stance on geothermal unit

As reported by Reuters, First Gen says in a stock exchange filing that it does not plan to sell Energy Development Corp, its geothermal unit, even as acquisition interest has emerged. The company says Indonesian energy firm PT Barito Renewables is the only party that has expressed interest in a potential purchase of EDC.

First Gen confirmed in mid-July media reports that PT Barito Renewables had submitted a non-binding offer of about $5 billion for EDC. Barito Renewables does not immediately respond to a Reuters request for comment on the mid-July offer.

EDC owns and operates 13 integrated power stations in Leyte, Bicol, Southern Negros, and North Cotabato, according to the company website. Before November 2007, the business was a government-owned and controlled corporation known as Philippine National Oil Company-Energy Development Corporation, or PNOC-EDC.

Market reaction and renewable spending outlook

First Gen also confirms that it plans to allocate up to 160 billion Philippine pesos, or $2.55 billion, over the next five years for renewable energy projects covering hydropower, geothermal, wind and solar. The spending plan keeps attention on the group's broader clean energy expansion rather than on a disposal of its geothermal assets.

Shares of First Gen fall as much as 4.3% by 0612 GMT, while PT Barito Renewables drops as much as 2.2%. The moves indicate investor sensitivity to both takeover expectations and capital allocation plans in the regional renewable power sector.

In our earlier coverage of PT Danantara Investment Management, we explained that its international investment-grade ratings were affirmed largely because Indonesian government backing remains central to its credit profile. We also noted that planned capital injections and the group’s bond-issuance role support liquidity and funding capacity for future acquisitions and investments, while its outlook remains tied to Indonesia’s sovereign trajectory.

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