PSE Circular for Brokers No. 1331-99

June 7, 1999 PSE CIRCULAR FOR BROKERS NO. 1331-99 For Immediate Release PRESS RELEASE June 4, 1999 METRO PACIFIC TO SWAP ITS SMART HOLDING FOR PLDT SHARES Metro Pacific Corporation (MPC) announced today that it has agreed to transfer its 38.3 per cent holding in Smart Communications, Inc., to Philippine Long Distance Telephone Co. (PLDT) in exchange for Pesos 14.4 billion worth of new shares in the fixed-line carrier. PLDT will issue 13.4 million new shares to Metro Pacific at a value of Pesos 1,080 per share, representing a 2.4 per cent premium to the share's closing price on Friday of Pesos 1,055. The transaction values Smart at US$998 million. LibLex Concurrent with the transaction, Metro Pacific's parent, First Pacific, will transfer its 18.0 per cent holding in Smart to PLDT in exchange for 6.3 million shares in the Company valued at Pesos 6.8 billion raising the First Pacific Group's overall economic interest in PLDT to 23.0 per cent from 17.2 per cent. Additionally, Japan's Nippon Telegraph and Telephone Co. has agreed to take a 15 per cent holding in PLDT in exchange for its own 37.2 per cent interest in Smart and by subscribing for new shares. These transactions will establish NTT as PLDT's strategic partner, entitling it to two seats on the Company's expanded 13-member Board and seconding staff to become senior advisors to the Company. The transactions will bring together the Philippines' leading fixed-line operator and its largest cellular operator, enabling the enlarged PLDT group to benefit from the synergies of a joint operation. As a result of the transactions, PLDT will be well positioned to benefit from rapid changes in the international telecommunications environment by offering fully integrated telecom services including voice, mobile, Internet and data transmission to a rapidly growing segment of the Philippine population. The agreement will also enable PLDT to benefit from NTT's world-class technology, products and services, as well as its experience running telecommunications operations in Japan and other parts of Asia. Metro Pacific's President Napoleon Nazareno said: "The expotential growth that Smart has enjoyed since its establishment in 1994 has perhaps been Metro Pacific's greatest success story. But in view of dramatic changes occurring in telecom technology and the wave of consolidation taking place in this industry, it now makes sense for Smart to join forces with PLDT. This also confirms to Metro Pacific's strategy of increasingly focusing its interest in property development and we would expect, in due course, to dispose of our stake in PLDT." cdt The transactions are in the form of a non-binding memorandum of understanding, and require final approval of the boards of PLDT, First Pacific and NTT, as well as various regulatory, shareholder and other approvals. It is expected that the transactions will be concluded by the end of the year.