The support comes with conditions that keep CEO Federico R. “Piki” Lopez (FRL) and his team in place.
The funding is backed by standby letters of credit, essentially bank guarantees that step in to cover obligations if needed, giving First Gen financial support and added credibility for the project.
The support is split into two facilities worth about P9.9 billion and P14.85 billion.
This allows First Gen to complete the transaction and fund its share in the Wawa and Pakil hydro projects without immediately deploying full cash.
Leadership tied to financing
Under the arrangement, a change in leadership can trigger a default on loans tied to the group, effectively putting pressure to maintain continuity at the top.
“BDO’s commitment terms are clear that maintaining the role of FRL in the FPH group is critical, such that replacing FRL will trigger defaults in the loan agreements of the [First Philippine Holdings] group,” First Gen said in a stock exchange filing on Friday.
“Such a structure not only ensures that the FPH group maintains a unified strategic direction under FRL, but underscores the link between the FPH group’s financial footing and its leadership under FRL,” it added.
Razon side also required Piki’s group to stay
This is similar to a separate provision in First Gen’s deal with Razon-backed Prime Infrastructure, where a leadership change could allow the partner to buy back assets at a discount.
Such clauses are typical in large, long-term energy and infrastructure transactions.
In BDO’s case, this structure signals confidence in the current leadership, while also protecting the bank’s exposure to a multibillion-peso investment.
Why this matters now
The dispute centers on a move by the Lopez family majority, led by Eugenio “Gabby” Lopez III, to remove Pike Lopez over loss of trust.
The move has been contested and remains unresolved following a court order.
—Edited by Miguel R. Camus
