The group said key “poison pill” provisions tied to major transactions were disclosed months late, in violation of rules requiring timely and full disclosure to investors.
These provisions are triggered if Piki Lopez or his associates are replaced, allowing partners to unwind deals or buy assets at a discount, exposing First Gen to potential significant losses.
The family majority, led by Eugenio “Gabby” Lopez III, said the “Securities and Exchange Commission and the Philippine Stock Exchange should conduct an investigation and ask First Gen to explain why it did not disclose the poison pills when they disclosed the two transactions in November last year and in February this year.”
High-stakes deals
Those transactions include the P50 billion sale of 60 percent of First Gen’s gas assets to Prime Infrastructure and a P75 billion acquisition of Prime’s hydropower business, later reduced to 33 percent.
The majority said the potential penalties tied to these provisions could reach P24 billion, or roughly a third of the company’s market value, with implications for dividends and share prices.
It also questioned why such material terms were not elevated to shareholders and were instead approved only at the board level.
First Gen earlier said the provisions were introduced at the request of Razon-backed Prime Infrastructure as part of their agreement, tying the deal to leadership continuity.
It added that a similar structure was also embedded in BDO’s standby credit facilities, underscoring the bank’s confidence in existing leadership while safeguarding its exposure.
Governance questions deepen
First Gen acknowledged the provisions only after the issue was raised publicly and the exchange sought clarification.
In its response, the company said the November provision would only be triggered if the February agreement is activated, a position the majority said raises more questions than answers.
—Edited by Miguel R. Camus
