First Gen (PSE: FGEN) has signed a term sheet with Prime Infrastructure Capital for a strategic partnership that would see the latter acquire a 60% stake in former's gas business.

The companies said they are still negotiating the final terms of the transaction.

Under the proposed deal, Prime Infrastructure Capital will acquire shares in First Gen's holding companies, giving it indirect ownership of key gas assets located in Batangas City.

Prime Infra is expected to pay 50 billion Philippine pesos upon closing. First Gen will retain a 40% stake to ensure operational continuity and help maintain energy stability, the power company said.