Bacnotan Consolidated forms partnership with world's biggest cement producer

July 15, 1998 PSE CIRCULAR FOR BROKERS NO. 1629-98 Bacnotan Consolidated forms partnership with world's biggest cement producer Bacnotan Consolidated Industries, Inc. (BCII), the cement holding company of The PHINMA Group, today announced that it has reached an understanding with Switzerland-based Holderbank Financiere Glaria, Ltd., the world's largest cement producer, on the entry of Holderbank as an equity partner in BCII's newly established subsidiary, Union Cement Corporation (UCC). UCC has been organized as the holding company for BCII's interests in three cement manufacturing companies, namely, Bacnotan Cement Corporation, Davao Union Cement Corporation, and Hi Cement Corporation, including shares in Hi Cement held through BCII's subsidiary, Atlas Cement Corporation. Holderbank has agreed in principle to subscribe 40 per cent of UCC stock and acquire UCC convertible bonds, for a total amount of US$210 million. Holderbank will also contribute its standards of best practice and new product research to the cement Manufacturing subsidiaries. These are expected to upgrade significantly the products and values of the cement companies. LLpr Ambassador Ramon Y. del Rosario, Sr. Chairman of BCII and The PHINMA Group, said. "I am delighted to welcome Holderbank our partner for our cement operations. Its investments, especially at this time, reflects confidence not only in The PHINMA Group but likewise in the Philippine economy and the future of our country." Oscar J. Hiladu, Chairman and Chief Executive Officer of PHINMA and President of BCII, added: "Being the world's lending cement producer, Holderbank's entry will make a significant, positive contribution to our cement businesses. Its combination with BCII will preserve BCII's long-term leadership position in the Philippine cement market. We look forward to working closely with Holderbank to achieve this objective." BCII will retain effective control of 60 per cent of UCC through its direct shareholding and through its subsidiary, Atlas Cement Corporation. It expects its partnership with Holderbank to have substantial advantages for each of the cement manufacturing subsidiaries and for the shareholders of BCII and these subsidiaries. BCII is the largest consent holding Company in the Philippines. It started its cement operation in 1957. Its cement Manufacturing subsidiaries have a total of 5.5 million metric tons in clinker capacity per year. Cdphil Holderbank has operations in 56 countries and production capacity of 78.9 million metric tons a year. In 1997 it had a turnover of US$7.769 billion. ING Barings acted as financial adviser to BCII on the entry of Holderbank in UCC, AB Capital and Investment Corporation acted as domestic adviser. For more information, please contact Roberto M. Lavina at telephone 8188204