First Gen Corp. clarified the inclusion of “Key Man” clauses in its hydropower joint venture with Prime Infrastructure Capital Inc., dismissing descriptions of the management control provisions as a “poison pill” and asserting the terms were a requirement of its partner.

The power producer said in a statement on Thursday, April 16, that the provisions were requested by Prime Infra, led by tycoon Enrique K. Razon Jr., to ensure the continued involvement of Federico “Piki” R. Lopez, First Gen chairman and chief executive officer (CEO).

”It was not First Gen but Prime Infra that requested the inclusion of the CMC [change of management control] or Key Man provisions. Prime Infra’s request for inclusion of the CMC provisions shows the level of trust and confidence that Prime Infra has in FRL and its management team,” the company said.

The First Gen-Prime Infra joint venture aims to develop 2,000 megawatts of pumped storage hydro capacity, comprising the 600-megawatt Wawa project in Rizal and the 1,400-megawatt Pakil facility in Laguna.

Under the disclosed terms, a CMC event occurs if Lopez or his designated team no longer holds specific leadership positions. These triggers include Lopez ceasing to be CEO of First Gen, his designees losing their majority on the First Gen board, or Lopez losing his seat on the board of the parent firm, First Philippine Holdings Corp.

The agreement also mandates that Lopez remain the proxy entitled to vote First Gen’s shares in the project companies and that his team continues to lead the executive committee.

However, the financial stakes of a management shift are significant. If a CMC occurs during the construction phase or within one year of the start of commercial operations, Prime Infra holds the right to compel First Gen to sell its stake in the project subsidiary, Prime Hydropower Energy Inc., at a discount.

While such clauses are often viewed by analysts as defensive measures to ward off hostile takeovers, First Gen noted that the structure reflects Prime Infra’s reliance on current management’s expertise rather than a tactic to block potential bidders.

Prime Infra earlier said that First Gen is a “seasoned local energy player” and a “trusted partner” whose track record is vital for the safe and timely delivery of complex infrastructure. 


Last April 13, the majority faction of the family holding firm Lopez Inc. said the ₱62 billion hydropower agreement between First Gen and Prime Infra contained “poison pill” that penalizes the Lopez Group by P16 billion if Piki is removed from leadership.

The majority characterized the clause as an act of self-dealing designed to protect the executive’s position following a board vote to remove him for loss of trust and confidence.

While a court order has temporarily blocked his ouster, the majority alleges the deal was authorized during a brief board session without proper disclosure to the stock exchange or shareholders.