MAJORITY shareholders of Lopez Inc. on Monday raised concerns over what they described as another “poison pill” provision that could allow Prime Infrastructure Capital Inc. (Prime Infra) to acquire First Gen Corp.’s remaining stakes in its gas and hydropower businesses at a steep discount if leadership changes occur.
The Lopez majority, which is embroiled in a leadership dispute with president and CEO Federico “Piki” Lopez — who is also First Gen’s chief — said that his removal from the energy firm would allow Prime Infra to take full ownership of the gas assets at a 25-percent discount.
“In other words, it protects Piki from losing his job and at the same time, if the pill is triggered, benefits only Prime. The shareholders of First Gen are thrown under the bus. So who is Piki working for?” they said in a statement.
The group said the poison pill provisions could result in an estimated P24-billion loss for First Gen, citing two separate mechanisms embedded in prior agreements tied to transactions between the two firms.
Earlier this year, First Gen acquired a 40-percent stake in Prime’s hydropower assets for P75 billion as part of a broader partnership, which was later reduced to 33 percent or about P62 billion following adjustments.
If the clause on the hydropower deal is triggered, the discounted buyout could translate to roughly P16 billion in losses for First Gen and would leave Prime Infrastructure as the sole owner of the hydropower business.
The second provision, meanwhile, will allow Prime Infra to acquire First Gen’s remaining 40-percent stake in its gas business, after having previously purchased a 60-percent share, also at a 25-percent discount. This could result in an additional P8-billion loss and could similarly lead to full ownership by Prime Infra.
The Lopez majority described the provisions as “egregious self-dealing,” saying shareholders were neither consulted nor fully informed about the transaction.
The group said it was seeking to determine whether the arrangements were approved by the board, including independent directors, and whether proper disclosures were made to the Philippine Stock Exchange (PSE) in a timely manner.
“Not content with selling away our gas crown jewel, Piki made sure he would remain on top — and relevant — but at everybody else’s expense,” they said.
The majority voted 5-2 in February to remove Piki as president and chief executive of Lopez Inc. in February, citing loss of trust and confidence. Piki, however, has secured a court order blocking his removal.
The issue underscores escalating tensions within the Lopez group and raises governance concerns over transactions involving strategic energy assets and minority shareholder protection.
First Gen shares added P0.08, or 0.45 percent, to close at P17.86 apiece on Monday amid a 0.28-percent rise for the benchmark PSE index.
