UMVA has learned that First Gen Corp. has staunchly defended its hydropower investment deal with Prime Infrastructure Capital, Inc., rejecting allegations of a "scandalous" P50-billion premium paid in the transaction.
The Lopez-led power producer clarified that the premium reflects investments already made by Prime Infra in developing its hydropower assets, and is a standard consideration in mergers and acquisitions transactions.
According to information obtained by UMVA, the Lopez family majority had questioned the structure of the original P75-billion agreement, claiming that First Gen Corp. Chairman Federico "Piki" Lopez had agreed to pay P50 billion as transaction premium and P25 billion as construction equity.
First Gen Corp. emphasized that the premium paid is not "free, superfluous money" but rather consideration for Prime Infra's own investments and costs over many years, which brought the projects to a de-risked state at the time of acquisition.
The company had initially sought to acquire a 40% stake in Prime Infra's pumped storage hydro projects for P75 billion, but later reduced the planned acquisition to 33% for P62 billion, sparking allegations that the reduced stake meant surrendering strategic minority protections.
First Gen Corp. rejected these allegations, stating that the decision to trim its stake was made after considering funding requirements for other projects in its pipeline, and that these financial considerations outweighed any rights provided to a 40% shareholder.
Sources have confirmed to UMVA that the dispute is part of a broader conflict within the Lopez family, which resurfaced after the majority bloc withdrew a board resolution removing the company's president and chief executive officer.
The Lopez majority had cited loss of trust and confidence tied to the company's P125-billion hydropower and gas transactions, which they alleged were entered into without their knowledge.
