KKR Exits Philippine Power Firm First Gen in $456 Million Sale

Abrupt Exit After Failed Privatisation

KKR has disposed of its entire stake in First Gen Corporation, the Lopez-controlled Philippine power producer, barely a month after the founding family rejected the US private equity firm's proposal to take the company private.

Valorous Asia Holdings, the KKR-linked vehicle, sold 715.8 million First Gen shares on 10 September for P25.77 billion, equivalent to P36 per share, according to a regulatory filing. The transaction, which included shares held through Philippines Clean Energy Holding Inc., left KKR with no remaining position in the Manila-listed company.

The buyer was Angsana Finance Limited, a Cayman Islands entity wholly owned by Gateway Holdings Limited. Gateway Partners, an emerging markets investment firm operating from Singapore and Dubai, already holds interests in the Philippines through UNO Digital Bank.

Premium to Rejected Offer

The sale price represents a modest premium to KKR's own valuation just weeks earlier. In August, First Philippine Holdings, First Gen's parent company, turned down KKR's non-binding proposal to acquire an additional 8.43% stake and launch a voluntary tender offer for the entire public float at P35 per share.

First Philippine Holdings said the proposed price failed to reflect First Gen's "true value." The tender offer, had it proceeded, would have supported a potential voluntary delisting from the Philippine Stock Exchange.

KKR ultimately exited at P36 per share, P1 above the tender price it had floated. The transaction marks the end of a stake that gave the New York-based firm significant influence over one of the Philippines' major independent power producers.

Board Reshuffle Follows

Manolo Michael de Guzman resigned as a First Gen director and member of the Board Risk Oversight Committee effective 11 September, one day after KKR completed the sale. De Guzman, a senior adviser at KKR and president of Philippines Clean Energy Holding Inc., departed without First Gen stating a reason for his exit.

His resignation removes KKR's direct board representation and signals a clean break for the private equity investor.

Gateway's Philippine Bet

Gateway Partners now steps into KKR's position as a substantial shareholder. The firm, which focuses on emerging markets across Asia, the Middle East, and Africa, has been building exposure to Southeast Asia's fifth-largest economy.

Its backing of UNO Digital Bank, one of the Philippines' newer digital lenders, suggests an appetite for financial services and infrastructure plays in the archipelago. The First Gen acquisition adds a significant energy asset to that portfolio.

First Gen operates a diversified power generation portfolio spanning natural gas, geothermal, wind, and solar. The company is part of the Lopez Group, one of the Philippines' oldest business conglomerates, with interests spanning energy, property, and media.

Implications for Philippine Energy

The stake transfer occurs as the Philippines grapples with rising electricity demand and intermittent supply constraints. Independent power producers like First Gen play a critical role in supplementing state-controlled generation capacity.

KKR's exit, while unexpected in timing, reflects the liquidity challenges of holding minority stakes in family-controlled Asian conglomerates where founding shareholders retain decisive influence. The Lopez family's rejection of the privatisation proposal underscored its determination to maintain control over core energy assets.

Gateway's entry introduces a new institutional investor willing to accept a minority position. Whether the firm seeks board influence or operational input remains unclear, but its track record in emerging markets suggests a longer investment horizon than KKR's relatively brief holding period.

The transaction also highlights the continued appeal of Philippine power assets to international capital, despite regulatory complexity and the dominance of entrenched family groups. With the country's energy transition still in early stages, independent producers with diversified fuel sources remain attractive to investors betting on sustained demand growth.