Financial Crisis Taking its Toll on A Brown

July 7, 1998 PSE CIRCULAR FOR BROKERS NO. 1548-98 July 3, 1998 PHIL. STOCK EXCHANGE, INC. Disclosure Department 4/F PSE Centre, Exchange Road Ortigas, Pasig City Attention: Mr . Reynaldo P . Ong Vice President Listings and Disclosure Group SUBJECT : Financial Crisis Taking its Toll on A Brown Gentlemen : This is in reply to your query via fax dated July 2, 1998. Please be advised of the following factual and accurate considerations of the matter: 1. That the news article captioned "Financial crisis taking its toll on A Brown" published in the July 1, 1997 issue of Manila Times were not press release materials from our end. The Manila Times reporter named Ms. Rosemarie A. Bueno was not even officially invited to cover the said event. Hence, said article was released without our consent nor awareness. 2. That a significant and material amount of the data indicated in the article are incorrect and were not presented in its original context . 3. The intent was simply to keep abreast the attending stockholders on the company's performance and its plans for 1998. 4. That the following facts are true and accurate: 4.1 We have already signed the Memorandum of Understanding with Antipolo Properties, Inc. for the development of the 14 hectare Binangonan property adjacent to their Eastridge Golf and Country Club. This fact was already disclosed to SEC and PSE on our letter dated June 2 and 3, 1998, respectively. 4.2 First semester savings of P40M over 1997 Operating expenses. 4.3 Postponement of major projects such as Manresa Golf and Country Club in Cagayan de Oro, Valencia Residential Subdivision in Bukidnon and Davao Businessman's Airport Hotel in Davao City. (This was discussed to explain to our Stockholders the measures we have taken in the light of the soft property market condition. While this is true, we believe that this is not a matter for official disclosure yet to our stockholders in as much, as the potential gain of these projects were not in anyway forecasted nor plan in the current fiscal year 1998). cdt 5. That the following figures and information that appeared in the article are not accurate and misrepresented in the article : 5.1 Inaccurate figure Our interest cost during the first quarter of 1997 stood at about P44M to P130M by year-end. Should be Our interest cost during the first quarter of 1997 stood at about P44M to P113M by end 1997. (This figure were discussed to provide analysis of the 1997 audited figures). 5.2 Misrepresentation Mr. Yulo said they stand to gain P562M or P304M at the least, from the P573M worth of mixed-used property. Should be A Brown potential gain from unsold lots in our fully developed project in Cagayan De Oro is about P552M while for unsold shares estimated gain is about P611M worth of mixed-used property. (This was discussed to stress the completion of the project within budget and to highlight the quality of our assets). cdlex 5.3 Misrepresentation A Brown Chairman, W.W. Brown said that their property projects will be postponed. . . Fact Our Chairman is not present during the said meeting, hence, no-disclosure on property projects was personally made to the reporter. n 5.3 Misrepresentation A Brown management agreed to sell some of its less strategic assets such as warehouses and branch offices in Metro Manila. Should be In W. Brown, the marketing and distribution subsidiary of ABCI, the management had consolidated some of the warehouses locations and we have also relocated branches in Metro Manila which is one of the contributing factor to the P40M savings as stated earlier. "The sale of the less strategic assets" was discussed in relations to undeveloped properties. 5.4 misrepresentation Despite these projects setbacks Yulo said that A Brown believes they can catch up and have a projected full year based on the continuous upward trend of its P69M revenue in May. Should be A Brown consolidated revenues from January to June of this year showed an upward trend from Jan figure of P69M to about P120M in the month of June. For details, please refer to the attached chart on revenues. We hope this clarifies your concern. Also, please be informed that we will release to other newspapers an article of the event in the next few days but we will however accompany this with the appropriate SEC Form 11-C to be submitted to SEC and PSE. Thank you. Very truly yours, (SGD.) JORGE M. YULO President n Copied verbatim from document obtained directly from Philippine Stock Exchange .