The Lopez family majority has openly contested First Gen Corporation’s move to downsize its targeted stake in Prime Hydropower Energy, Inc. (PHEI) from 40 percent to 33 percent, claiming the decision lacks both a legal foundation and the necessary board approval.
According to a statement from the family, this downsizing took place just three weeks after the board initially greenlit the original 40-percent buyout on February 13, a deal valued at ₱75 billion. That initial agreement featured a ₱50-billion premium designed to cover more than Prime’s total project-related expenditures.
While the adjusted framework drops the total acquisition price to ₱62 billion and lowers the premium to ₱42 billion, the Lopez family contends the shift leaves Prime with a dominant 67-percent controlling interest.
Consequently, they argue that First Gen is taking on the brunt of the investment risks while being relegated to a minority shareholder with significantly weakened corporate rights.
The family raised concerns over which of the two agreements holds legal weight and called out independent directors Manuel Ayala, Alicia Rita Morales, and Edgar Chua for publicly claiming the deal received unanimous board backing. They noted that the initial 40-percent acquisition was tucked under “other items” on the board’s agenda and was debated for merely an hour.
While directors previously emphasized the project’s long-term dividend upside, the family questioned why the company would immediately shrink its share if the asset was truly that lucrative.
First Gen previously defended the reduction, explaining it was vital to free up capital for other “high-potential assets in the pipeline.” However, the Lopez family fired back, stating that such a sudden reversal casts serious doubt on whether the directors were given a clear and accurate picture of the company’s liquidity and financial health before voting.
Furthermore, the family highlighted that major state-backed institutional investors, such as the Social Security System (SSS) and the Government Service Insurance System (GSIS), hold stakes in First Gen. They warned that these institutions should be wary of any deal that could harm government interests.
They urged regulatory bodies to step in and investigate the situation, pointing out delayed disclosures, poison pill mechanisms, and cross-default clauses that could jeopardize sister companies under the First Gen umbrella not involved in the deal.
The family took strong exception to First Gen’s regulatory disclosure, which cited “significant financial considerations” as the driving force behind choosing monetary savings over the robust rights of a 40-percent ownership. The family interpreted this statement as a direct admission that basic shareholder protections were compromised for financial convenience.
Lastly, the family dismissed First Gen’s claims that the company could easily negotiate with Prime Infra later on to buy back the lost 7 percent.
Maintaining that there is no guarantee Prime would ever sell those shares back, the family challenged Lopez Inc. President Federico “Piki” Lopez to present a formal, written pledge from Prime proving they are open to future divestment, alongside clear terms and pricing.