Three independent directors of First Gen Corporation have fired back at the Lopez family majority, defending their approval of a P50 billion investment in two hydropower projects with Enrique Razon's Prime Infrastructure Capital.

In a joint statement released Tuesday, June 16, directors Alicia Rita Morales, Edgar Chua, and Manuel Ayala said they fulfilled their "fiduciary duties to First Gen by exercising objective and independent judgment" in evaluating the deals. The projects are the 600-megawatt Wawa Pumped Storage Hydroelectric project in Rizal province and the 1,400-MW Pakil PSH in Laguna province.

The statement came after the Lopez family majority — 71% of ultimate parent firm Lopez Inc. — called the investments a "horrible" deal for First Gen. They said the company paid Prime Infra P50 billion as a "transaction premium" or entry fee to join the hydropower business. They also questioned whether the independent directors were properly informed.

The three directors said the P50 billion premium was justified because Prime Infra had already achieved major milestones for the projects at its own cost. These included securing financial close, obtaining development rights and authorizations, locking in offtake agreements, and starting construction.

"These milestones have effectively reduced the risks typical of large-scale infrastructure investments such that First Gen was willing to invest in the projects at the agreed valuation," the directors said.

They added that such premiums are "typical consideration in M&A transactions" and part of the acquisition cost.

The directors also addressed the "Change of Management Control" provision that the Lopez majority calls a "poison pill." They said it's a "relatively standard clause in contracts for energy infrastructure involving large investments."

According to the directors, First Gen's 33% stake in both projects is expected to generate annual earnings of P16 billion once the projects are completed by 2030. Until then, there won't be any income from the investments.

The three directors have varying tenures on the board. Morales was elected independent director in May 2018 and is on her eighth term. Chua was elected in May 2021 and is on his fifth term. Ayala was elected in May 2025 and is only on his first term.

They said the P61.87-billion valuation agreed upon for First Gen's 33% ownership "represents an equitable and justifiable consideration" for the years and resources Prime Infra put into developing the projects.

"We, therefore, stand four-square behind our decision to support both projects, which all members of First Gen board unanimously approved," they concluded.

The family feud

The dispute is part of a broader rift within the Lopez family. Piki Lopez, chairman of First Gen, is facing opposition from the Lopez family majority, which controls 71% of Lopez Inc., the family's holding company.

Earlier this month, the family majority released a statement questioning the deals. They asked whether the independent directors had approved the transactions or were "properly disclosed to them." They also questioned if the directors had enough information to properly do their job.

The Lopez family has a long history in Philippine business, with interests spanning energy, media, and infrastructure. The current feud is seen as one of the most significant internal battles in the family's history.

The projects are expected to be completed by 2030. Until then, First Gen won't earn any income from its investments. The independent directors have made their position clear, but the family majority may continue to challenge the deals.

The dispute could also affect First Gen's stock price and investor confidence. Shareholders will be watching closely as the family feud plays out.