The Lopez family majority on Tuesday launched a fresh attack on Federico “Piki” Lopez, accusing him of approving a “scandalous” hydropower transaction that handed Prime Infrastructure control of two major projects while First Gen supplied most of the funding.
At stake is First Gen’s investment in Prime’s pumped-storage hydro projects in Rizal and Laguna.
The family said First Gen, led by CEO Federico “Piki” Lopez, will invest about P61.9 billion yet own only 33 percent of the venture, leaving tycoon Enrique Razon Jr.’s Prime with 67 percent ownership and control.
The projects are still under construction and are not expected to generate cash flow for several more years.
Majority claims lopsided deal
According to the majority, this means First Gen is taking on much of the funding and execution risk while remaining a minority investor.
“This is a horrible deal for First Gen,” the family majority, led by Eugenio “Gabby” Lopez III, said in a statement on Tuesday.
“The family majority has been asking Piki for documents regarding the original and reduced transactions to no avail,” it added.
First Gen shares rose 1.7 percent to P16.14 each on Tuesday morning.
Deal terms questioned anew
The family said the deal was originally structured as a P75-billion investment for a 40 percent stake before it was later reduced to 33 percent ownership.
It further stated that only P25 billion of the original investment represented actual project equity.
Based on that calculation, the majority argues that roughly P50 billion effectively served as a premium paid to Prime.
The family also claimed that after the stake reduction, Prime would need to contribute only about P625 million of additional equity to retain its 67 percent ownership and control of the projects.
Peace overtures tested
The latest broadside comes weeks after the Lopez family majority withdrew a resolution seeking the removal of Piki Lopez as head of First Gen parent firm Lopez Holdings, a move that had raised hopes the dispute was beginning to ease.
His removal could also trigger so-called poison pills in deals with Prime Infrastructure, potentially resulting in multibillion-peso penalties for First Gen and hurting the family’s financial interests.
During First Gen’s annual meeting last May 28, Piki welcomed peace overtures within the Lopez family but cautiously said he remained “fully prepared for any outcome.”
—Edited by Miguel R. Camus
