MINORITY shareholders of Lopez-led First Gen Corp. have raised questions anew regarding the company’s P75-billion hydropower deal with Enrique Razon Jr.’s Prime Infrastructure Capital Inc., particularly about the deal’s structure, valuation and disclosure.
The group alleged that First Gen President Federico “Piki” Lopez agreed to a “horrible” transaction structure involving a P50-billion premium and P25 billion in construction equity for the hydropower assets.
“This is a horrible deal for First Gen,” the minority shareholders said. “As we have been saying, we do not and cannot trust Piki.”
They further claimed that First Gen later reduced its stake in the transaction from 40 percent to 33 percent, lowering the total deal value from P75 billion to P61.875 billion and significantly reducing the required equity contribution from Prime.
Based on the revised structure, the group said Prime would only need to contribute about P625 million.
“Prime has no skin in the game but will get bulk of profits,” they claimed.
The shareholders also questioned whether First Gen retained sufficient governance safeguards following the restructuring, including minority veto rights in the project.
They added that they had sought documentation on both the original and revised transactions but had not received full disclosures.
The group had earlier urged regulators to review the transaction, calling on the Philippine Stock Exchange and the Securities and Exchange Commission to “require First Gen to tell all to protect the investing public.”
To date, First Gen has yet to address the allegations raised by the minority shareholders.
The hydropower deal, first announced earlier this year, forms part of First Gen’s expansion in renewable energy through its partnership with Prime Infrastructure.
Market observers note that any regulatory scrutiny would likely focus on disclosure standards, valuation methodology, and governance procedures in relation to the transaction.
First Gen is one of the country’s largest power producers, with a portfolio spanning natural gas, geothermal, hydro, wind, and solar assets.
As of end-2024, First Philippine Holdings Corp. (FPH) directly and indirectly owned 67.84 percent of the common stocks of First Gen and 100 percent of its voting preferred shares.
In turn, FPH is 55.66 percent owned by Lopez Holdings Corp., majority of which is owned by Lopez Inc., the ultimate parent company of First Gen.
The company’s shares added P0.16, or 1.01 percent, to close at P16.08 each on Tuesday, in line with a 1.13-percent advance for the benchmark Philippine Stock Exchange index.