MANILA - After the P20.07 billion cash payment for its stake in Manila Electric Company, Lopez-led First Philippine Holdings Corp (FPHC) has prepaid P6.9 billion worth of debt issues.

In a disclosure to the stock exchange, FPHC said its pro-rata prepayments accounted for 50% of its outstanding floating rate notes. FPHC has dollar-denominated notes due October 2012 and peso tranche notes due October 2014.

"This has significantly reduced First Philippine Holdings’ debt profile and allows for more financial flexibility both in the short and long term,” the company said.

FPHC received the P20.07 billion sale proceeds of its stake in Meralco last July 15. FPHC previously sold its 20% stake in the power retailer to Pilipino Telephone Corp, the new energy holding company of Philippine Long Distance Telephone Corp. (PLDT) as a strategy to ward off a perceived battle for board control from another Meralco shareholder, the San Miguel Corp.

FPHC's stake in Meralco has been reduced to 13.4% since the sale to its ally, the PLDT group.

FPHC has been selling non-core assets, including its stake in the highway operator Manila North Tollways Corp, which was also sold to a PLDT sister company, the Metro Pacific Investment Corp.

Earlier, FPHC also raised P4.3 billion from issuing preferred shares.

These proceeds had been used to pre-pay loans. FPHC president Elipdio Ibanez earlier said the company plans to pay $200 million out of the outstanding $440 million worth of debts. Last year, FPHC also pre-paid $20-$25 million worth of debts.

Expansions

With its debt and capital structure in much better shape, FPHC, which is the holding firm for the power and manufacturing businesses of the Lopez family, is on an expansion mood.

It has entered into a joint venture with US-based SunPower Manufacturing Ltd to operate a wafer slicing plant at the First Philippine Industrial Park in Batangas. It cited the growing solar energy industry, where SunPower is a major player, as reason for the deal.

It is also looking to raise its stake in other core subsidiaries, including First Gen Corp. and and Rockwell Land Corp.

At the same time the company also planning to use other proceeds to fund strategic acquisitions programmed this year up to 2011 as well as other capital and operating requirements.