MANILA, Philippines — In a move that highlights the high stakes of the ongoing Lopez family feud, BDO Unibank Inc. has made its nearly P25-billion financial backing for First Gen Corp. strictly conditional on the leadership of its chairman and CEO, Federico “Piki” Lopez.
The country’s largest lender issued standby letters of credit (SBLCs) totaling P24.75 billion to support First Gen’s acquisition of a 33-percent stake in Prime Hydropower Energy Inc. (PHEI). However, the funding comes with a powerful “change of management control” covenant: if Piki Lopez is removed or loses control, the loan goes into default.
According to a disclosure filed by First Gen on Friday, the credit support is split into two facilities—P9.9 billion and P14.85 billion. These funds are earmarked for the 1,400-megawatt (MW) Pakil and 600-MW Wawa pumped storage hydro projects, critical pieces of the Philippines’ renewable energy push.
BDO’s terms specify that an “event of default” will be triggered if:
- Federico “Piki” Lopez or his designated team no longer hold top management or board positions.
- The Lopez family’s ownership stake in First Philippine Holdings (FPH) falls below a specific threshold.
- Voting control over First Gen’s shares in the hydro projects is shifted.
“BDO’s commitment terms are clear that maintaining the role of Piki in the FPH is critical,” the company stated. “Such a structure underscores the link between FPH’s financial footing and its leadership under Piki.”
The timing of the bank’s requirement is significant. The Lopez group is currently embroiled in a bitter internal struggle between Piki Lopez and a majority faction of shareholders led by his cousin, Eugenio “Gabby” Lopez III.
Earlier this week, the Gabby-led faction flagged similar provisions in the deal with tycoon Enrique Razon Jr., calling them a “poison pill” that could force a P16-billion loss if Piki were to be ousted. BDO’s latest condition reinforces this “leadership lock,” making it financially catastrophic for the family majority to remove him from his post at First Gen or FPH.
While critics view these clauses as a defensive maneuver by Piki to keep his seat, corporate analysts note that banks often require leadership continuity in massive, long-term infrastructure projects to ensure strategic stability.
In a separate but related development, the ABS-CBN board (also part of the Lopez empire) issued a statement of “overwhelming support” for CEO Carlo Katigbak, signaling a unified front among the management teams currently steering the group through its various financial and legal challenges.
For now, BDO’s P25-billion vote of confidence ensures that as long as the hydro projects move forward, Piki Lopez remains the indispensable hand at the helm.