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Disclaimer: This is for informational purposes and is not investment advice. Figures are taken from company disclosures and exchange data; valuation ratios include the author’s calculations based on cited inputs.
What the Lopez Group’s ₱50‑billion decision says about First Gen—and ABS‑CBN
When Prime Infrastructure Capital Inc., led by Enrique Razon Jr., completed its ₱50‑billion acquisition of a controlling stake in First Gen’s gas business, it was widely framed as a landmark energy transaction. Less discussed—but no less consequential—was what the Lopez Group chose to do next with the proceeds.
Rather than channeling the windfall toward shoring up ABS‑CBN Corp., the group’s financially strained media arm, the Lopezes effectively recycled that capital back into the energy sector, partnering again with Prime Infra—this time in pumped‑storage hydropower projects that will take years to complete.
The decision highlights a quiet but decisive shift in internal capital priorities—one that carries implications not only for First Gen’s balance sheet, but also for ABS‑CBN’s long road to recovery.
A Tale of Two Businesses
On paper, the contrast is stark.
First Gen is profitable, asset‑heavy, and central to national infrastructure. ABS‑CBN, by contrast, has spent the past five years in retrenchment mode after losing its broadcast franchise in 2020. While the media company has made progress—narrowing losses significantly in 2024 and 2025—it remains loss‑making and capital‑constrained, relying on asset sales, cost reductions, and digital monetization to stay afloat.
The ₱50‑billion payment from Prime Infra gave the Lopez Group a rare degree of financial optionality. That capital could have been used to accelerate ABS‑CBN’s balance‑sheet repair, retire debt, or fund a more aggressive transformation strategy. Instead, it was deployed—directly and indirectly—into long‑dated energy infrastructure alongside the same counterparty that paid it.
From a purely financial standpoint, the logic is understandable. Energy assets generate predictable cash flows, benefit from regulatory support, and command scale advantages. Media assets, particularly in a disrupted advertising market, do not.
What It Means for First Gen
For First Gen, the recycling of capital reinforces a strategic pivot already underway.
By selling majority control of its gas assets to Prime Infra for ₱50 billion, First Gen reduced its capital intensity in fossil fuel generation while retaining a meaningful minority stake. The proceeds strengthened liquidity and freed up balance‑sheet capacity. That capacity is now being redeployed into pumped‑storage hydropower, a form of infrastructure that supports the renewable energy transition but demands patience from investors.
Financially, the effect is mixed.
In the near to medium term, pumped storage consumes cash without contributing earnings. Construction will stretch over several years, increasing non‑current assets, raising funding requirements, and placing upward pressure on leverage. Dividend growth is likely to slow as cash is preserved for equity injections and debt servicing.
Over the long term, however, these assets promise durable, system‑critical revenues in a grid increasingly reliant on intermittent renewables. Once operational, they are expected to enhance cash flow visibility and strengthen First Gen’s competitive position.
In short, First Gen has chosen to reinvest windfall capital into assets that deepen its role as a backbone utility—even at the cost of near‑term financial flexibility.
What It Means for ABS‑CBN
For ABS‑CBN, the implications are less comforting.
The media company has made measurable progress. Net losses were cut by more than half in 2024, and further improvements were reported in 2025 as content production, digital platforms, and live events gained traction. Asset sales, including prime real estate, have helped manage debt.
But recovery has been incremental and internally funded.
By not receiving a substantial capital infusion from the group’s energy windfall, ABS‑CBN remains dependent on self‑help measures: cost discipline, partnerships, licensing deals, and selective monetization of its content library. This approach reduces risk to the holding group but extends the timeline for ABS‑CBN’s return to profitability.
The message—implicit but clear—is that ABS‑CBN must stand on its own balance sheet, not the surplus capital of its sister company.
A Capital Allocation Signal
This is not simply a story about one company choosing energy over media. It is a statement about where the Lopez Group sees enduring economic value.
Energy infrastructure offers scale, longevity, and alignment with national development priorities. Media, even when culturally influential, operates in a far more volatile commercial environment. Faced with that choice, the group opted to double down on the former.
That decision may disappoint stakeholders who hoped the ₱50 billion would ease ABS‑CBN’s financial strain. But from a holding‑company perspective, it reflects a disciplined—if unsentimental—view of capital allocation.
The Trade‑Off Ahead
For First Gen shareholders, the trade‑off is patience. Dividends remain defensible, but growth may pause as capital is tied up in long‑gestation projects.
For ABS‑CBN stakeholders, the trade‑off is autonomy. The company continues its turnaround without a large internal bailout, proving viability through operating improvements rather than capital transfers.
Ultimately, the Lopezes’ decision underscores a reality often obscured in conglomerates: capital is finite, and priorities are revealed not by statements, but by where the money goes.
In choosing to recycle ₱50 billion back into power generation—rather than into media rehabilitation—the group has made its priorities unmistakably clear.
We’ve been blogging for free. If you enjoy our content, consider supporting us!
Disclaimer: This is for informational purposes and is not investment advice. Figures are taken from company disclosures and exchange data; valuation ratios include the author’s calculations based on cited inputs.
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