FIRST Gen Corporation has signed a call option agreements with three firms for the purchase of Energy Development Corporation (EDC) shares. A call option contract gives the holder the right to buy a certain quantity of an underlying security from the writer of the option at a specified price up to a specified date. This developed as First Gen parent First Philippine Holdings Corporation (FPHC) had completed the sale of an additional 6.6% in Meralco to Beacon Electric Asset Holdings Inc., a unit of Metro Pacific Investments Corporation, for P22.41B in March.

The agreements, which were signed with Philplans First Inc., Rescom Developers Inc. and Philhealthcare Inc., and Systems Technology Institute Inc., grant First Gen call options for the purchase of 585 million EDC shares equivalent to 3.12% of EDC for a period of three years or up to April 2013.

Under the agreements, First Gen will be entitled to exercise its call option over the EDC shares at the exercise price of P5.67 per share for the first year, P6.19 per share for the second year and P6.76 for the third year. If exercised in full, the transactions will be worth P3.32 billion in the first year, P3.62B in the second year and P3.95B in the third year, for a total of P10.89B.

“With the additional resources we can continue to take advantage of other opportunities in the power and energy sector, with the end view of maximizing value for all our stakeholders,” said FPHC chairman Oscar M. Lopez.

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