PSE Circular for Brokers No. 1699-98

July 22, 1998 PSE CIRCULAR FOR BROKERS NO. 1699-98 July 21, 1998 LISTINGS AND DISCLOSURE GROUP Philippine Stock Exchange 4/F Philippine Stock Exchange Center PSE Center, Exchange Road Ortigas Center, Pasig City Attention: Mr . Reynold P . Ong Vice-President Gentlemen : We refer to your letter dated 20 July 1998 (which we received by fax late in the afternoon of that date) regarding the news article captioned "Guoco to sell Pepsi holdings" published in the 20 July 1998 issue of Today. In your fax-letter, you requested to clarify/confirm the following: 1. Guoco Holdings (Philippines), Inc.'s ("Guoco") plan to sell its sake in Pepsi-Cola Products Philippines, Inc. ("Pepsi") after disappointment over the latter's poor performance and for the reduction of its debt and financing of its operations; and 2. Guoco's negotiations with Lucio Tan who expressed interest in buying a stake in Pepsi to support the beer business of Asia Brewery, Inc.. Please be informed that the above items mentioned in the subject news article are NOT TRUE . 1. Guoco has no plan to sell its stake in Pepsi. Contrary to the news report, Guoco is satisfied with the strong performance of Pepsi which nearly doubled its sales during the fiscal year ending June 1998. Sales volume of the company surpassed industry growth (reaching 110 million cases vs. 65 million cases during the previous fiscal year) and enabled the company to significantly push up its market share to 20% from a low of 12% last year. The company is expected to continue surpassing industry growth as additional plants and bottling lines become operational this fiscal year. The company is targeting to sell most of its new capacity totaling at least 150 million cases annually. 2. Guoco has not negotiated with Mr. Lucio Tan relative to the latter's acquisition of an interest in Pepsi. Guoco is unaware of any interest by Mr. Lucio Tan or anybody else in buying its stake in Pepsi. There has been no negotiation whatsoever with Mr. Lucio Tan. LLpr Guoco and Pepsi, however, are considering several capital-raising exercises which will offer good opportunities for additional financial investors who have expressed strong interest in Pepsi, in light of the rebound in Pepsi's market. We trust we have sufficiently clarified the above matters. Best regards. Very truly yours, (SGD.) ATTY. DAISY L. PARKER Corporate Secretary