Manila's First Gen picks JP Morgan for stake sale

MANILA, Feb 29 (Reuters) - Philippine power producer First Gen Corp (FGEN.PS) said on Friday it has picked JP Morgan (JPM.N) as financial advisor for a planned sale of a portion of its stake in the country's biggest geothermal firm, PNOC-Energy Development Corp (EDC.PS).

"The proposed transaction will be by way of negotiated purchase, competitive bidding, or any other means as may be agreed upon," First Gen said in a statement to the stock exchange.

Oscar Lopez, chairman of First Philippine Holdings Corp (FPH.PS) which owns First Gen, said last month the group was in talks with a Japanese firm he declined to name which was looking to take up a 40 percent stake in Red Vulcan Holdings.

Red Vulcan was the vehicle used by First Gen to buy a majority stake in PNOC-EDC last year in a deal valued at $1.35 billion.

First Gen currently holds a 100 percent stake in Red Vulcan after it bought out its partner Netherlands-based Spalmare Holding BV in early January.

Spalmare, a joint venture between Icelandic firms Reykjavik Energy Invest hf and Geysir Green Energy ehf, had an option to rejoin Red Vulcan but that option expired on Thursday.

First Gen raised $260 million from a convertible bond offer managed by JP Morgan last month. It wants to raise $1.1 billion this year from the bond market or by issuing commercial paper for debt refinancing and expansion of its power projects.

The 2013 convertible bond, which carried a coupon of 2.5 percent, was listed on the Singapore Exchange early this month. (Reporting by Rosemarie Francisco; Editing by Ben Tan)