The majority faction of the Lopez family has reignited its feud with First Philippine Holdings Corporation and First Gen Corporation chairman and CEO Federico R. “Piki” Lopez, questioning First Gen Corp.’s recent P75-billion acquisition of hydropower assets.

In a statement issued Tuesday, the faction described the transaction as a “horrible” deal, alleging that the Piki Lopez-led First Gen agreed to pay a P50-billion transaction premium and provide P25 billion in construction equity as part of the P75-billion acquisition of a 40-percent stake in a hydropower business owned by another major local energy company.

‘Scandalous’ premium

The faction further alleged that the “scandalous” premium was not disclosed to the stock exchange. It also claimed that Piki Lopez subsequently reduced First Gen’s stake from 40 percent to 33 percent, lowering its investment from P75 billion to P61.875 billion, to the detriment of First Gen.

Under the arrangement, the faction said, the deal partner would retain 67 percent of the profits while contributing only P625 million.

“In effect, Piki funded the whole project that is yet to be built, has no cash flow for years, and faces multiple completion risks. This is a horrible deal for First Gen. As we have been saying, we do not and cannot trust Piki,” the faction said.

P24 billion worth of ‘poison pills’

The majority faction, which claims to represent about 71 percent of the shares of the family’s holding company, Lopez Inc. (LI), said the premium comes on top of the alleged P24 billion worth of “poison pills” embedded in First Gen’s recent transactions.

According to the group, these provisions would be triggered if Piki Lopez or his associates were removed from their positions.

Tuesday’s statement effectively ends a month-long truce within the family after the majority faction earlier signaled its willingness to de-escalate the dispute by withdrawing its petition to remove Piki Lopez as president and chief executive officer of Lopez Inc., the private, ultimate parent holding company of the family.

“Harm has been done to everybody. Reputational damage is there. Our family has been in a fishbowl with everybody looking in. Agreements have been signed with undeserved financial penalties especially for the investing public,” the majority faction said in a 14 May statement.

A step towards reconciliation

For his part, Piki Lopez previously welcomed the withdrawal of the board resolution seeking his removal, describing it as a step toward reconciliation within one of the country’s largest family business groups.

“I view the gesture of withdrawing the board resolution as a possible first step for all parties to finally resolve the issues that have unfortunately been dividing our clan,” Lopez said during First Gen’s annual stockholders’ meeting on 28 May.

“I hope that this initial step will lead to an amicable, fair and lasting resolution of the rift within the family and the Lopez Group,” he added.

Piki Lopez has since pursued legal action against members of the majority faction, including former ABS-CBN chairman Eugenio “Gabby” Lopez III, in connection with his attempted removal as head of the family’s private ultimate holding company.