MANILA, Philippines — First Gen Corp., the energy arm of the Lopez conglomerate, has clarified that a controversial "key man" provision in its major hydropower agreements was requested by its partner Prime Infrastructure Capital Inc., not by First Gen's CEO Federico "Piki" Lopez.
The company issued the statement amid escalating scrutiny of the clause, which has become a focal point in the ongoing leadership dispute within the Lopez family. The provision, formally known as a change of management control (CMC) clause, ties the continuity of two significant pumped storage hydro projects to Piki Lopez's continued leadership.
"The clause reflects Prime Infra's trust in Piki's leadership and his proven track record in executing large-scale energy projects," First Gen stated.
The affected projects include the 600-megawatt Wawa project in Rizal and the 1,400-megawatt Pakil project in Laguna, representing substantial investments in the country's renewable energy infrastructure.
Under the agreement, a CMC event could be triggered if Piki Lopez or his designated team members lose key roles, including the CEO position or board control. If activated during construction, Prime Infra would have the right to require First Gen to sell its stake in the projects at a discounted rate.
The majority control group of Lopez Inc., led by Eugenio "Gabby" Lopez, has criticized the provision as a "poison pill" that could potentially expose the conglomerate to over ₱23 billion in losses. They have raised concerns that details of this arrangement were not properly disclosed to the Philippine Stock Exchange, despite First Gen being a publicly listed company.
This corporate governance dispute follows a recent board vote at Lopez Inc. where directors voted 5-2 to remove Piki Lopez for "loss of trust and confidence." However, Piki secured a court injunction shortly after the vote, temporarily blocking his ouster and preventing his removal from other Lopez-affiliated companies.
The clarification from First Gen positions the key man clause as a standard safeguard in large energy contracts rather than a defensive measure initiated by Piki Lopez, adding another layer to the complex family and corporate dynamics currently unfolding within one of the Philippines' most prominent business groups.