The majority faction of the Lopez family revealed on Wednesday that they uncovered a third “poison pill” clause, which dictates that First Philippine Holdings (FPH) subsidiaries EDC, First Balfour, and First Gen would default on their financial obligations if Lopez Inc. President Federico “Piki” Lopez is ousted from First Gen.
In a released statement, the Lopez majority labeled these stipulations as “booby traps” rigged against the very enterprises Piki was entrusted to protect.
According to the majority group, the default clause is embedded within a ₱25 billion standby letter of credit that FPH secured from BDO. This credit facility was intended to bankroll First Gen’s ₱62 billion investment in Prime Infrastructure’s hydropower sector, an initiative first made public in an April 17 press release by First Gen.
A default status would compel the affected subsidiaries to settle their debts immediately or face steep penalty rates. Such a scenario would significantly restrict the corporations’ borrowing capacities, potentially crippling their corporate expansion and daily operations.
“He has in effect threatened to torch the very house that sheltered him all these years. In fact, his family branch which owns 29% of the Lopez group, would also lose billions, all for one reason: Piki must not lose his job”, the statement said.
“The family majority was neither consulted nor informed about these investments and credit facilities, and had been unsuccessful in getting more information and documents from Piki about them,” it added.
This discovery follows two previously unearthed poison pill agreements that threaten to saddle First Gen with over ₱23 billion in losses. Those prior clauses grant Prime Infrastructure the right to buy out First Gen’s ₱50 billion stake in Prime’s gas project and its ₱62 billion share in the hydropower business at a steep 25% discount should Piki be removed from his post.
The internal dispute escalated earlier when the family majority voted 5-2 on the board to strip Piki of his titles as president and CEO of Lopez Inc. However, Piki managed to secure a court injunction temporarily halting his removal.
Defending the transactions, First Gen previously clarified that the controversial clauses were explicitly requested by its joint-venture partners, maintaining that the company only executes contracts that have received formal approval from its board of directors.