PSE Circular for Brokers No. 1608-99

July 2, 1999 PSE CIRCULAR FOR BROKERS NO. 1608-99 July 1, 1999 Ms. Eileen M. Lacorte Analyst, Listings and Disclosure Group, The Philippine Stock Exchange, Inc. 4th Floor, Philippine Stock Exchange Centre, Exchange Road, Center, Pasig City Dear Ms. Lacorte : This is with reference to your facsimile yesterday requesting us for a clarification on the news article which appeared in the 30 June 1999 issue of the Philippine Daily Inquirer entitled "Uniwide gets debt relief from SEC". We would like to inform the Exchange that in relation to our petition for suspension of debt payments, the Securities and Exchange Commission (SEC) in its order dated 29 June 1999, stated that "in order for the SEC to effectively and judiciously evaluate the petition, let a suspension order be issued effective for a period of thirty (30) days from issuance hereof. A copy of the said order from the SEC is attached for your reference. In our rehabilitation plan submitted with the SEC, Uniwide Sales Warehouse Club, Inc. is seeking for a new capital infusion of P500 million as soon as possible for the purpose of fully restocking its stores, improving its product mix and availing supplier discounts to improve margins. Currently, the Uniwide Group is actively negotiating with four investor groups. The negotiations are in various stages and are expected to conclude an agreement within six months or sooner. cdpr Hope you will find the above in order. Very truly yours, (SGD.) SUSAN O. LIGERALDE Investor Relations Manager SEC CASE NO. 06-99-6340 IN THE MATTER OF: PETITION FOR DECLARATION OF SUSPENSION OF PAYMENT, FORMATION AND APPOINTMENT OF A REHABILITATION RECEIVER/COMMITTEE AND APPROVAL OF REHABILITATION PLAN. UNIWIDE SALES, INC. UNIWIDE HOLDINGS, INC., NAIC RESOURCES & DEVELOPMENT CORPORATION, UNIWIDE SALES REALTY & RESOURCES CORP., FIRST PARAGON CORPORATION And UNIWIDE SALES WAREHOUSE CLUB, INC. Petitioners ORDER Before this Commission is a petition filed on June 25, 1999 by six (6) corporate-petitioners namely: Uniwide Sales, Inc., Uniwide Holdings, Inc., NAIC Resources & Development Corp., Uniwide Sales Realty & Resources Corp., First Paragon and Uniwide Sales Warehouse Club, Inc. The petition alleged, inter alia , that petitioners are affiliate companies under the common ownership of the Gow family loosely called the "Uniwide Group of Companies" and are engaged in various areas of business activities and investments; that petitioners have been very viable and financially profitable in the previous years, but in recent years, petitioners acquired vast tract of rawland as they embarked on a nationwide expansion of their retail and realty businesses; and that expansion exhausted the petitioners' cash position because readily available funds were absorbed by the financial requirements of Uniwide Holdings Inc., NAIC Resources & Development Corp. and Uniwide Sales Realty & Resources Corp. for the purchase of vast tracts of land and their development. It is likewise alleged that a huge-amount of debt was incurred to finance the real estate development in different places and the acquisition of amusement rides for their theme park project: that their liquid status resulted in the accumulation of past due accounts with trade suppliers which drastically reduced inventory levels and credit limits; that petitioners' cash levels were not sufficient to support overhead and debt servicing thus, new loans were incurred to finance maturing obligations which resulted in further deterioration of their operations due to significant interest payments; and the factors beyond their control and anticipation came into play like: the oversupply in the real estate business, the inflation, the unpredictable peso-dollar exchange rate in 1997 which resulted in soaring interest rates and the loss of their number one store generating 11% of its business. By virtue of these developments, the petitioners claim, that there is a need for the suspension of all accounts or obligations in their separate and combined capacities while they are working for their rehabilitation as the petitioners have reached their credit limits which may result in their inability to meet the loans as they fall due and may also result to impairment of their operations negating whatever prospects the petitioners have; that as of May 31, 1999 they have a total assets of P19,864,007,881 which allegedly are more than enough to pay off their liabilities of P11,101,621,628; and that petitioners wish to prevent their business operations from being paralyzed and their assets from being dissipated, lost or wasted as their creditors have started to press for payments of due and presently maturing obligations. Petitioners aver that the primary objective of the petition for rehabilitation is to ensure the servicing and eventual full payment of all petitioners' debt by stabilizing their operations and for them to prepare and take advantage of future opportunities for growth with the support of all parties; and that given the necessary breathing space with the support of their creditor-banks, petitioners have the reason to be confident that they will be able to meet their obligations in due time. In order for the Commission to effectively and judiciously evaluate the petition, let a suspension order be issued effective for a period of thirty (30) days from issuance hereof. Under this Order, all claims, actions and proceedings against herein petitioners pending before any court, tribunal, office, board, body and/or commission are hereby SUSPENDED. Meanwhile, petitioners are hereby DIRECTED 1. to submit list of each petitioners' equity security holders showing the name of the security holder and the kind of interest registered in the name of each holder within three (3) days from receipt hereof; 2. to submit list of petitioners' assets, stating the specific nature, book value, market value, location, copies of TCT, OCT, CTC or CCT in case of real properties or copies of certificates of ownership in case of personal properties within three (3) days from receipt hereof; 3. to immediately publish this Order in two (2) newspapers of general circulation once a week for two (2) consecutive weeks; and 4. to serve all creditors a copy of this Order as well as the Petition, together with its annexes, within three (3) days from receipt hereof in order for the said creditors to file comment thereto within ten (10) days from receipt hereof. LibLex Let a hearing be held on July 21, 1999 at 10:00 o'clock in the morning at 5th Floor, SEC Bldg., EDSA, Greenhills, Mandaluyong City for the petitioners to present evidence in support of their petition. SO ORDERED. City of Mandaluyong, Philippines June 29, 1999 (SGD.) PERFECTO R. YASAY, JR. Chairman (SGD.) ENRIQUE L. FLORES, JR. (SGD.) MANOLITO S. SOLLER Hearing Officer Hearing Officer