The Lopez family majority is questioning the terms of First Gen Corp.'s hydropower partnership with Prime Infrastructure Capital Inc., arguing that the deal unfairly burdens First Gen with nearly all the investment and risks while Prime reaps most of the benefits.
In a statement issued Friday, the family revealed that First Gen agreed to pay a premium of approximately P42 billion for a 33% stake in Prime Infra's hydropower business, down from an earlier P50-billion premium for a proposed 40% stake. Even after this reduction, the family claims Prime would contribute only about P625 million net to the roughly P62-billion project while retaining a 67% interest.
"Prime needs to put up only a net amount of about P625 million for the P62-billion project, or 1 percent in return for 67 percent of profits," the family said.
The transaction, according to the statement, effectively reimburses Prime Infra for its development expenses while leaving First Gen responsible for most of the project funding.
The Lopez majority also raised concerns about the board's approval process, noting that directors discussed the transaction for only an hour in executive session and listed it under "other matters" on the agenda. Additionally, they flagged "poison pills" and a standby letter of credit that could expose First Gen to default risks if Piki Lopez loses his position.
The statement further cited potential risks from project cost increases and transmission charges, arguing that First Gen lacked sufficient protection due to the absence of a negotiated price adjustment mechanism in the agreement.
First Gen has previously defended the Prime Infra transaction, and its independent directors have publicly expressed support for the deal.