Lopez majority: Piki agreed to P50-B premium in Prime hydro deal

MANILA, Philippines – The majority bloc of the Lopez family alleged that Federico “Piki” Lopez agreed to pay a P50-billion transaction premium to Prime Infrastructure Capital Inc. as part of First Gen Corp.’s P75-billion investment in the latter’s hydropower business.

The deal between First Gen and Prime Infrastructure has become a flashpoint in the ongoing family dispute over control of the Lopez Group.  

In a fresh statement on Tuesday, the Lopez-led group, headed by Eugenio “Gabby” Lopez III, said First Gen’s acquisition of a 40-percent stake in Prime’s hydropower assets included a premium on top of the P25 billion in construction equity.

READ: Piki seeks ‘lasting’ Lopez peace

The group claimed it learned of the alleged premium only recently through board documents.  

The transaction traces its roots to First Gen’s purchase earlier this year of a stake in Prime Infra’s hydropower platform, a deal that formed part of a broader partnership between the two groups. 

The Lopez majority has repeatedly criticized the transaction, arguing that it favored Prime Infra at the expense of First Gen shareholders.

According to the family bloc, First Gen disclosure informed that it would use P62.5 billion to directly fund the projects’ construction and equity requirements. 

The majority also questioned First Gen’s subsequent decision to reduce its stake in the hydropower business from 40 percent to 33 percent, lowering the transaction value to about P61.9 billion. 

READ: Lopez majority flags third ‘poison pill’ tied to Piki removal

It said the move gave Prime absolute control of the venture, while effectively stripping First Gen of strategic minority veto rights. 

The criticism comes months after the Lopez majority accused Piki Lopez of approving “poison pill” provisions in deals with Prime Infra.

“This is a horrible deal for First Gen,” the Lopez majority said, arguing that the company would shoulder most of the funding requirements for projects that have yet to be completed and are not expected to generate cash flows for several years.  

The group also questioned whether Prime Infra paid a premium for full control of the hydropower firm and whether First Gen’s board had enough information to approve the deal. /pai INQ