THE Lopez family’s majority bloc has called on First Gen Corp.’s management and board to justify a proposed transaction involving Prime Infrastructure Capital Inc.’s (Prime Infra) hydropower assets, arguing that the deal was unfavorable to Lopez Inc. shareholders.
In a statement on Friday, the bloc said First Gen, led by its President and CEO Federico “Piki” Lopez, had agreed to shoulder nearly all of the funding requirements for Prime Infra’s pumped storage hydropower (PSH) projects while receiving only a 33-percent stake in the portfolio.
The group claimed that as structured, the First Gen-Prime Infra deal would contribute only a minimal amount to First Gen relative to the project’s total cost while Enrique Razon Jr-led Prime Infra would retain a majority share of future profits.
It claimed that First Gen would still be paying a premium of around P42 billion under the revised structure, down from an original P50 billion after First Gen had cut its stake in the venture to 33 percent from 40 percent.
“Piki went all in with First Gen’s money all for the pittance of keeping his job. He and the board must explain why they failed to protect First Gen and agreed to pay P42 billion, or a 200 percent premium,” the bloc said.
It also questioned the process by which the transaction was approved, alleging that the matter was discussed for only an hour during an executive session and was listed under “other matters” in the board agenda.
It further raised concerns about provisions that it said could expose First Gen to additional financial obligations if Lopez were removed from his position.
The majority further noted that while the independent directors of First Gen had publicly supported the transaction, they questioned whether sufficient time had been allotted to evaluate the complexities of the deal.
The group also cited potential risks related to project cost increases and transmission charges, arguing that First Gen lacked adequate protection against these exposures.
First Gen has yet to issue a response to the latest allegations.
First Gen representatives were not immediately available for comment.
Lopez Inc. is the private holding company of the Lopez family, which manages key business interests spanning renewable energy (First Gen), multimedia communications (ABS-CBN Corp.), and property development (Rockwell Land Corp.) through publicly listed subsidiaries like Lopez Holdings Corp. and First Philippine Holdings Corp.
On Friday, First Gen shares defied the broader market’s downtrend, closing up P0.10, or 0.63 percent, at P16.00 each, while those of Lopez Holdings Corp. and First Philippine Holdings Corp. were unchanged at P4.00 and P82.00 each, respectively.
