First Gen Corp., a Lopez-led energy company, has disclosed potential financial exposure of up to P23 billion due to a "change of management control" provision in its agreement with Prime Infrastructure Capital Inc.
In a regulatory filing, the company revealed that this clause allows Prime Infra to force the sale of First Gen's hydropower stake at a 25% discount, amounting to approximately P15.5 billion. This includes projects currently under construction, such as Wawa and Pakil.
Additionally, the provision could extend to First Gen's remaining gas plant interests, potentially adding another P8 billion in discounted sales, bringing the total possible exposure to around P23 billion.
"The clause is triggered only under specific conditions related to Federico 'Piki' Lopez and his designated representatives," the company stated.
These conditions include scenarios where Piki Lopez is no longer CEO, loses control of the board, or ceases to influence major corporate decisions. The provision applies during project construction and for one year after commercial operations begin.
First Gen emphasized that exercising this option is not automatic and depends entirely on Prime Infra's decision. The company noted that these arrangements were requested by Prime Infra and reflect its confidence in Piki Lopez's management team.
Despite the potential financial risk, First Gen assured stakeholders that operations continue normally without disruption. The disclosure follows recent board tensions at Lopez Inc., where directors voted to remove Piki Lopez, though he subsequently obtained a court order blocking his ouster across Lopez-affiliated companies.