the Outsider - PSE Points to Ponder

  Fresh equity can repair the broadcaster’s balance sheet, but creditor banks tied to the Ayala and Aboitiz groups will determine whether the money finances a recovery—or merely repays old obligations. **MANILA—**ABS-CBN Corp.’s proposed ₱6 billion capital infusion gives the debt-laden media company something it has lacked since losing its broadcast franchise in 2020: time. Whether it produces a turnaround is another question. The broadcaster said I&C Holdings Corp. would invest ₱3.5 billion, while three Lopez family investment vehicles—Crème Investment Corp., Mantes Corp. and Presta Holdings Co.—would contribute a combined ₱2.2 billion. Lopez Inc. would invest another ₱300 million. ABS-CBN’s board approved the transaction on August 13, a day after the subscription agreements were signed. The company said the proceeds would be used for general corporate purposes.  The transaction would inject permanent capital without adding interest expense. I&C, established by invest...

  Ramon Ang’s purchase gave Gabby Lopez’s family branch an undisclosed amount of cash—and gave the billionaire a seat inside one of the Philippines’ most storied business groups. The unanswered question is whether the proceeds could finance a rescue of its most famous but financially troubled company. **MANILA—**Ramon S. Ang has built a reputation for making large bets on difficult businesses. His latest investment came with an unusually conspicuous omission: the price. On August 10, Ang acquired the 25.68% interest in Lopez Inc. previously held by Crème Investment Corp., the investment vehicle representing the family branch of former ABS-CBN chairman Eugenio “Gabby” Lopez III. Ang made the purchase personally through his wholly owned Illumina Investment Holdings Inc., rather than through San Miguel Corp., the conglomerate he chairs. Neither party disclosed the purchase price, payment terms, or rights attached to the shares. Lopez said the sale was intended partly to help restore ...

  Buying First Gen could give Prime Infrastructure a listed vehicle, end a damaging control dispute, and provide the Lopez group with enough capital to repair its empire—including ABS-CBN. Sometimes the price of corporate peace is best expressed per share. For the Lopez family, that figure may be ₱81 . At that price, First Gen Corporation would carry an equity value of approximately ₱291 billion , or about US$4.75 billion . That would represent a formidable premium over FGEN’s recent market price near ₱20, but it would also recognize the hidden value of its interest in Energy Development Corporation, its remaining gas exposure, hydroelectric assets, pumped-storage investments, and an unusually liquid parent balance sheet. FGEN has approximately 3.597 billion common shares outstanding, making the arithmetic straightforward. The most plausible buyer need not be found abroad. Enrique Razon Jr.’s Prime Infrastructure Capital Inc. is already doing business with FGEN on both sides of the...

  How the Lopez family responds to Barito Renewables’ approach for EDC will test whether its corporate pyramid protects control—or respects the capital supplied by everyone else. Corporate pyramids are efficient machines for separating control from ownership. A family can govern a large industrial empire while supplying only a fraction of its underlying equity. Such structures are not inherently objectionable. Outside investors enter them voluntarily, often because a controlling shareholder contributes something valuable: patience, operating expertise, political durability, or a coherent long-term vision. But the bargain carries an obligation. The less capital controllers have at risk, the more carefully they must demonstrate that decisions are being made for all shareholders rather than principally to preserve control. That is why the unsolicited approach by Indonesia’s PT Barito Renewables Energy Tbk, or BREN, for Energy Development Corporation is more than a takeover proposal. I...

The Lopezes are fighting over an empire whose operating assets sit far below them, while only a modest stream of dividends reaches the family apex. At first glance, the Lopez family quarrel looks like a fight over power: board seats, patriarchal authority, corporate succession, and the right to speak for one of the Philippines’ oldest business dynasties. Look closer, however, and it becomes something more modern and more uncomfortable: a fight over a pyramid whose jewels sit far below the family holding company, while the cash reaching the summit has become surprisingly thin. The latest spark is First Gen, the listed power producer under First Philippine Holdings and Lopez Holdings, where the family dispute has spilled over into allegations of a ₱50bn hydropower “premium” paid in connection with First Gen’s investment in Prime Infrastructure’s pumped-storage projects. The Lopez majority bloc has questioned the economics and disclosure of the deal; First Gen has responded that the final...