First Gen Corp. (FGEN) has signed a share purchase agreement with Prime Infrastructure Capital, Inc. (Prime Infra) to sell a 60 percent equity stake in its gas business.

In a stock exchange disclosure on Wednesday, FGEN said the agreement follows the term sheet signed between the parties on 30 May. The Lopez-led company did not provide a timeline for the transaction’s completion.

The agreement covers Prime Infra’s acquisition of stakes in key natural gas assets, including the 1,000-megawatt (MW) Santa Rita, 500-MW San Lorenzo, 450-MW San Gabriel, and 97-MW Avion power plants. It also includes the proposed 1,200-MW Santa Maria plant and the Interim Offshore LNG Terminal.

“Subject to the approval of the Philippine Competition Commission and certain conditions precedent,” the deal will result in Prime Infra indirectly owning 60 percent of these assets. FGEN, on the other hand, will retain a 40 percent stake.

“In consideration for the FGEN shares, Prime Infra has agreed to pay FGEN the amount of P50 billion upon closing of the transaction,” the company said. 

“First Gen will likewise be entitled to receive additional earnout amounts, subject to the fulfillment of certain conditions.”

FGEN’s gas assets, located in Batangas City, are considered vital to national energy security. Both companies said they will work closely with the government to help secure the country’s energy independence.

FGEN is the country’s largest renewable energy producer and supplies about 18 percent of the national power mix. 

Prime Infra, meanwhile, controls Manila Water Company, Inc., and Prime Energy, which operates the Malampaya gas-to-power project.