The bulk of the exposure comes from its recent hydropower deal with Prime Infrastructure, where First Gen bought a 33 percent minority stake.
If those control-change terms are triggered, Prime Infra can require the sale of First Gen’s hydropower stake at a 25 percent discount, equivalent to about P15.5 billion, the company said in a clarification to a report by InsiderPH.
The control-change clause also extends to First Gen’s earlier P50 billion deal to sell a majority stake in its gas plants to Razon.
If exercised, the agreement allows Prime Infra to acquire First Gen’s remaining gas plant stake at the same 25 percent discount.
That adds roughly P8 billion, bringing total potential exposure to around P23.5 billion if both are exercised.
Control trigger
The provision is tied to specific conditions involving CEO Federico “Piki” Lopez and his designees across management and board control.
A shift in these positions can activate the clause and open the path for discounted buyouts.
Not automatic
The clause applies only during the construction of the Wawa and Pakil projects and up to one year after operations begin.
The full P23 billion impact will only happen if Prime Infra chooses to exercise its rights, so it is not automatic.
What happened before
A majority faction within the Lopez family, led by Eugenio “Gabby” Lopez III, had earlier moved to remove his cousin Piki Lopez as Lopez Inc. CEO, citing loss of trust, but the move was blocked by a court order.
The clause has drawn attention because it links that leadership fight directly to a multibillion-peso financial impact.
The Gabby Lopez faction also alleged that these terms were not previously disclosed to the Philippine Stock Exchange.
—Edited by Miguel R. Camus
