BDO Unibank Inc. has provided substantial financial backing for a major Philippine energy acquisition, but with a crucial condition tied directly to leadership continuity within the Lopez family's corporate empire.
In a significant move, BDO issued standby letters of credit totaling P24.75 billion to support First Gen Corp.'s acquisition of a 33% stake in Prime Hydropower Energy, Inc. (PHEI). This investment fuels the development of two major pumped storage hydro projects—the 600-megawatt Wawa and 1,400-megawatt Pakil facilities.
However, the financial support comes with strict "change of management control" covenants that explicitly link the funding to the continued leadership of Federico "Piki" Lopez within the First Philippine Holdings (FPH) group.
"BDO's commitment terms are clear that maintaining the role of Piki in the FPH is critical, such that replacing Piki will trigger defaults in the loan agreements of FPH," First Gen stated.
The covenants establish that any replacement of Piki Lopez or his designated representatives in key management and board positions would constitute an event of default. The terms also safeguard voting control over First Gen's PHEI shares, board composition, and the Lopez family's ownership stake in FPH, which must remain above a minimum threshold.
This financial arrangement emerges against a backdrop of ongoing tensions within the Lopez family, which have rippled across their corporate holdings including First Gen and media giant ABS-CBN Corp. The leadership dispute previously involved court-issued injunctions blocking attempts to remove Piki Lopez as head of Lopez Inc.
In a separate development, ABS-CBN's board and advisors have expressed support for CEO Carlo Katigbak's leadership, describing the company as "an institution" that continues to serve the public despite losing its broadcast franchise. The board reaffirmed confidence in ABS-CBN's recovery plan and its pivot toward content provision.
The BDO financing structure underscores how financial institutions are now directly linking corporate governance to capital allocation, creating a direct connection between the Lopez group's financial stability and its leadership under Piki Lopez.