Cheyenne Suarez

Lopez majority hits First Gen, Prime Infra hydropower deal anew

Article (news)

ABS-CBN News

MANILA - The Lopez majority on Friday said it has asked Federico &quot;Piki&quot; Lopez and the First Gen board to explain why the company agreed to pay for virtually 100 percent of Prime Infrastructure hydropower projects in exchange for only 33 percent minority stake. In a statement, the group said, Prime Infra had been reimbursed for all its development expenses and had gotten a free ride through an original P50-billion premium, which is now down to P42 billion after First Gen reduced its stake in the projects to 33 percent from 40 percent.They claimed that even at this reduced level, Prime needs to put up only a net amount of about P625 million for the P62-billion project, or 1 percent in return for 67 percent of profits, &quot;with all risks borne by First Gen.&quot;“Piki went all in with First Gen’s money all for the pittance of keeping his job. He and the board must explain why they failed to protect First Gen and agreed to pay P42 billion, or a 200% premium”, the family said, adding that the deal was discussed hastily with no advance information given to the board.“How can a corporation, a listed one at that, be made to pay billions of pesos and be potentially in default for the job of one man and at the expense of hundreds of thousands of investors? No man’s job security is higher than the interest of a listed company anywhere in the world,&quot; it added.The majority also asked how the independent directors managed to fully study a complex transaction, which they also claimed was discussed for only an hour.The factions composed of majority of the family said First Gen does not have protection for these risks since it has already paid a significant premium. The majority claims there is no negotiated price adjustment mechanism with Prime Infra as found in other investment deals.For its part, First Gen earlier said it only enters into transactions that were properly scrutinized by its board.

The Lopez majority on Friday said it has asked Federico "Piki" Lopez and the First Gen board to explain why the company agreed to pay for virtually 100 percent of Prime Infrastructure hydropower projects in exchange for only 33 percent minority stake.

The Lopez majority on Friday said it has asked Federico "Piki" Lopez and the First Gen board to explain why the company agreed to pay for virtually 100 percent of Prime Infrastructure hydropower projects in exchange for only 33 percent minority stake.