the Outsider - PSE Points to Ponder

  First Gen Corp. is asking investors to look past the earnings drop and see a cleaner, more renewables-heavy company emerging from the sale of most of its gas business. The problem is that the transition is already consuming cash. The Lopez-led power producer reported a 15.7% decline in consolidated net income to ₱5.45 billion in the first quarter, while net income attributable to parent shareholders fell 23.8% to ₱3.63 billion . Recurring net income attributable to the parent dropped 24.7% to ₱3.38 billion , underscoring that the decline was not merely an accounting quirk.  On the surface, the quarter had plenty for bulls to like. Revenue from electricity sales rose 32.2% to ₱15.34 billion , driven by stronger geothermal, wind and solar output under Energy Development Corp., as well as a strong quarter from the Pantabangan-Masiway hydro complex. EBITDA climbed to ₱7.64 billion from ₱6.45 billion a year earlier. But underneath that growth, investors got a reminder that Firs...

  If the most consequential arguments in the Lopez clan end up at Lopez Inc., the irony is hard to miss: the private company at the very top of the empire received only about ₱247.37 million in dividends in 2025, even though the operating assets below it generated a far larger stream of cash several layers down.   The Lopez corporate structure still has the look of an old Philippine dynasty: a private family holding company at the apex, a listed intermediary beneath it, and below that the industrial assets that do the real work. But follow the money rather than the org chart, and a different picture emerges. The crown jewels are not parked at the summit. They sit lower in the stack, inside First Philippine Holdings Corp. (FPH) — the group company that owns the Lopez interests in clean and renewable energy, property, and other operating businesses. FPH says it directly and indirectly owns 67.84% of First Gen Corp. , holds 44,382,436 shares of Meralco — about 3.94% of the ut...

  In Philippine boardroom warfare, the concept didn’t arrive with Federico “Piki” Lopez. It had an earlier, rougher incarnation in the battle for PLDT, where Antonio “Tonyboy” Cojuangco used a poison pill not simply to fend off raiders, but to make himself the indispensable counterparty in any serious bid for control.   The term is back in circulation because of First Gen Corp., where the Lopez family’s internal feud has dragged a modern version of the tactic into public view. First Gen confirmed in April that its agreements with Enrique Razon Jr.’s Prime Infrastructure contain change-of-management-control provisions that would let Prime Infra force a buyout of First Gen’s hydropower stake at a 25% discount if Piki and his team were removed during a defined period; First Gen added that the gas-plant stake could also be sold at the same discount if the clause were exercised. First Gen said those provisions were requested by Prime Infra and reflected the counterparty’s confide...

  The most revealing feature of First Gen’s recent governance controversy is not the family drama. It is the architecture of control. In its clarification to the Philippine Stock Exchange, First Gen confirmed that its agreements with Prime Infrastructure contain Change of Management Control provisions that could force the company to sell its hydropower stake at a 25 percent discount , worth about ₱15.5bn , and could also expose its remaining gas-plant stake to a further ~₱8bn discount if Prime Infra exercises that right. In corporate language, that is not a trivial covenant. It is a deterrent with teeth. And whatever label one prefers — “key man clause” or “poison pill” — it functions as a defense against a hostile reordering of control. Strictly speaking, First Gen’s clause is not a classic poison pill. It is not a shareholder-rights plan of the Delaware kind, where all investors except a hostile bidder get discounted shares once an ownership threshold is crossed. But in econom...

First Gen’s “poison pill” may be dressed up as a key-man clause. But for investors, its real meaning is simpler: the company has tied billions of pesos of shareholder value to the continued primacy of one executive in the middle of an active family power struggle.   Enrique Razon Jr’s compliment to Federico “Piki” Lopez was flattering enough. Prime Infrastructure, First Gen says, insisted on a “change of management control” clause because it trusted Mr. Lopez and his team to execute two large pumped-storage hydro projects safely, efficiently, and on schedule. First Gen has even cast the arrangement as a “vote of confidence” from Mr. Razon — proof, in effect, that the company’s leadership was indispensable.  Yet the test of fiduciary responsibility is not whether a chief executive is admired by a counterparty. It is whether he converts that admiration into terms that protect the owners of the company he serves. On that standard, First Gen’s defense of its so-called poison pill ...

The feud now spilling across LPZ, ABS, ROCK and FGEN is not merely a family quarrel; it is a corporate-governance issue at the top of listed companies. The Lopez family’s dispute has ceased to look like a private quarrel and begun to resemble a public-markets problem. ABS-CBN itself has said that this is “a family dispute and should remain so” and that it should not be fought in public. Yet it is being fought in public — through statements, counter-statements and litigation that now spill across companies connected to the group.  That matters because these are not merely family assets. Lopez Holdings, First Philippine Holdings, First Gen, Rockwell Land and ABS-CBN are all publicly listed companies , each with minority shareholders who did not sign up to become spectators in a dynastic power struggle. Public reporting shows that the conflict is no longer confined to the private holding company. It has extended into ABS-CBN, where the company confirmed that one director proposed a sh...

A good stock exchange does not merely list companies. It disciplines them. That is why First Gen’s recent clarification on its agreements with Prime Infrastructure should alarm anyone who cares about Philippine capital markets. The company has now confirmed that its definitive agreements contain “Change of Management Control” provisions that could force it to sell its hydropower stake at a 25% discount—worth about ₱15.5 billion —and, if that right is exercised, could also expose its remaining gas-plant stake to a further ~₱8 billion discount. That is not gossip. It is a quantified, public admission of a contingent loss with potentially massive consequences for shareholders. Once a listed company itself can put a peso figure on a governance-triggered downside of that scale, the matter ceases to be a private dispute and becomes a capital-markets issue. The temptation is to dismiss this as merely another installment in the Lopez family feud. That would be a mistake. First Gen’s own clari...

  There is a temptation, when a company posts handsome headline earnings, to stop reading just as the numbers become interesting. First Gen’s 2025 results invite exactly that mistake. The group reported a stronger consolidated profit, helped in no small part by the sale of 60% of its gas business to Prime Infra and the resulting gain on sale, deconsolidation effects, and associate income. Yet the more revealing story lies elsewhere: in Energy Development Corporation, or EDC, the renewable-energy platform that now carries a larger share of First Gen’s strategic identity—and, increasingly, its valuation burden.  EDC is not merely one asset among many. It is the center of gravity of First Gen’s continuing business. In 2025, EDC contributed about US$785.7m of First Gen’s consolidated electricity-sale revenues, or roughly 87% of the total, and it accounted for around 1,464.76 MW of installed renewable capacity. After the gas-business sell-down reduced First Gen’s consolidated po...