Lopez family questions legal basis of revised First Gen hydropower deal

Controlling shareholder says reduction of Prime Hydropower stake from 40% to 33% was never approved by the board.

The battle over First Gen Corp.’s hydropower deal is intensifying, with the Lopez family now claiming that a decision to cut the company’s stake in Prime Hydropower Energy Inc. from 40% to 33% was never approved by the board.

The family, which controls one of the country’s largest power producers, said the original transaction approved on February 13 involved a 40% stake valued at ₱75 billion, including a ₱50-billion premium that would reimburse Prime Infrastructure, the infrastructure company controlled by Enrique Razon Jr. and First Gen’s partner in a multibillion-peso hydropower venture, for more than its development costs. Just three weeks later, the stake was reduced to 33%, bringing the deal value down to ₱62 billion and the premium to ₱42 billion.

The revised structure, they say, leaves Prime with a 67% interest while First Gen continues to carry most of the project’s risks despite holding only a minority stake.

The family also challenged statements from First Gen’s independent directors, questioning how the transaction could be described as unanimously approved when the original proposal was allegedly discussed for only about an hour and listed under “other matters” on the board agenda.

It likewise disputed First Gen’s explanation that the stake reduction was needed to preserve capital for future investments, arguing that such a significant change within weeks raises questions about whether directors had complete information when the original deal was approved.

The family is now calling on regulators, as well as state-run investors SSS and GSIS, to take a closer look at the transaction and related disclosures.

READ: