FGEN’s 7.808% Preferred Shares

Here’s an investment option for those interested in diversifying their portfolio.

First Gen Corporation (FGEN), the Lopez-owned independent power producer, is issuing to the public up to 100 million Series G perpetual preferred shares for P100 each. The shares guarantee a fixed dividend rate of 7.808% per annum.

What are Preferred Shares?

Like common shares, preferred shares are proof of one’s ownership share in a company. However, common shares have voting power while preferred shareholders do not have the right to vote. Instead, they get a fixed dividend amount every year, while common shareholders only get dividends when declared by the company. Also in case of a company’s liquidation, preferred shareholders are prioritized in terms of payment versus common shareholders.

The FGEN’s 7.808% preferred shares are non-voting, perpetual, cumulative, and non-convertible shares.

“Perpetual” means there is no definite holding period and the company will not redeem the shares.

They are also “cumulative” which means dividends not paid during the year will be added and paid on top of the next year’s dividends.

The shares are “non-convertible” which means owners do not have the option to convert them to common shares.

According to company documents submitted to the Philippine Stock Exchange (PSE), proceeds of the offering will be used to repay debt and to finance the acquisition of additional stakes in Sta. Rita and San Lorenzo power plants.

FGEN’s base offer is up to 70 million shares worth P7 billion with an option to release up to 30 million more shares if the earlier offering becomes oversubscribed.

The shares will be listed and traded on the PSE starting May 18.

To invest, contact your bank and inquire how you can make an investment. You might be endorsed to the bank’s Trust and Asset Management Division which will handle your request.

Disclaimer: PinoyMoneyTalk is not in any way related to the issuer or underwriter of the said investment product. This post is not made to endorse the product but to inform PMT readers about possible investment options. PMT was not paid to make this post. Invest at your own risk.