PSE Circular for Brokers No. 1638-99

July 6, 1999 PSE CIRCULAR FOR BROKERS NO. 1638-99 NEWS RELEASE July 5, 1999 RFM SIGNS IN NEW FOREIGN STRATEGIC PARTNER Food and beverage giant RFM Corporation, and WP Argosy Limited, a subsidiary of global private equity fund, E.M. Warburg Pincus & Co., Ltd., announced yesterday that they had signed an agreement which formalizes the latter's investment of about P2 billion into the company, in exchange for about 18% ownership. LexLib In a disclosure statement RFM announced that WP Argosy Limited will subscribe to anywhere from 230 to 325 million new shares of RFM over the next four years depending on RFM's performance versus agreed-upon earnings targets. In addition, the investor is also purchasing about 60 million secondary shares from existing shareholders of RFM, in order to bring their total share of the company's outstanding capital stock to about 18%. RFM President and Chief Executive Officer Jose A. Concepcion III stated that, "We have been in discussions with Warburg Pincus for over a year now, since I personally met with one of their founders, Lionel Pincus in New York. We believe that among those who have expressed interest in investing in RFM, Warburg and Argosy are the ones that have a truly long term view of their investment, and they possess the kind of strategic thinking, financial expertise and management philosophy that can help mold RFM in to the world-class corporation that we want it to be." E.M. Warburg, Pincus & Company is a major global venture banking firm with approximately US$ 11 billion in assets, of which US$ 4 billion are available in cash for investments around the world. The firm presently has investments in communications and media, consumer goods and services, environmental services, financial services, information technology, life sciences and health care, and natural resources. Over the past 13 years, Warburg Pincus has invested over $ 1 billion in over 50 companies in 16 countries outside the United States and as a result, has developed a strong international track record. Argosy Partners is a private equity investment advisory firm that focuses on taking large equity positions in Philippine companies that are major players in their respective sectors. The firm was formed last year by A.B. Colayco and Gloria Tan Climaco, and raised over US$ 180 million from major international institutional investors. Like Warburg Pincus, Argosy seeks to add value to their investee companies by sharing management experience, technical expertise and relationships, both domestic and international, of its directors, officers and institutional investors. "Their exposure in a variety of industries in emerging markets, plus their long years of experience in growing and professionalizing many world-class companies, will blend very well with the aggressive and entrepreneurial style that has brought RFM to where it is now in Philippine business." Concepcion added. Warburg Pincus Director Rajiv Lall said, "We are very optimistic about our investment in our RFM and expect this investment to be the platform upon which we will expand our presence in the fast growing food and beverage industry of the Philippines." cdll The RFM disclosure stated that the funds that will be infused will be used for the repayment of debt, the strengthening of its balance sheet, and new opportunities in the food business. The strengthening of RFM's balance sheet is being done in preparation for the aggressive expansion and strengthening of RFM's core businesses, namely: softdrinks, bottled water, flour, chicken, meat, tuna, juice, milk, ice cream, and food service. A number of acquisition projects are being considered by the company, to further establish its position as one of the leading food and beverage companies in the country. In 1998, RFM posted consolidated net sales of over P17 billion, and net income of about P705 million. The company is listed at the Philippine Stock Exchange and held its last public offering in April of 1991.