First Gen stands by Prime Infra deal amid Lopez feud

MANILA, Philippines – Independent directors of First Gen reaffirmed support for its multibillion-peso investment in two pumped-storage hydropower projects of Prime Infrastructure Capital Inc. despite ongoing scrutiny linked to the Lopez family feud.

In a statement, the directors said they stand by the approval of First Gen’s investment in the 600 MW Wawa and 1.400 MW Pakil projects following an independent review.

READ: P50-B ‘premium’ in Lopez-Razon hydropower deal questioned

“We stand four-square behind our decision to support both projects,” the independent directors said, noting that the transactions were unanimously approved by the First Gen board.

The directors cited projected annual earnings of about P16 billion from First Gen’s 33 percent stake, saying the project would create long-term shareholder value. They also underscored the projects’ contribution to energy security and renewable growth.

The statement comes as the Prime Infra transactions remain at the center of a dispute between First Gen CEO Federico “Piki” Lopez and the Lopez family majority.

Earlier this year, the Lopez majority raised concerns over provisions in the Prime Infra agreements, particularly a “change of management control” clause that could allow Prime Infra to acquire the assets at a discount under certain conditions. 

READ: Lopez discord deepens; majority probes Piki’s energy deals

The group argued that the provision could expose the company to significant financial risks if management changes occur.

Addressing the issue, First Gen’s independent directors said the provisions are standard in major energy projects and ensure the expertise needed for successful execution.

The directors also defended the P61.87-billion valuation agreed upon for First Gen’s 33-percent stake in the projects, saying it reflected the substantial development work and investments already undertaken by Prime Infra before the transaction. /pai INQ