Waterfront Philippines, Incorporated

July 22, 1998 PSE CIRCULAR FOR BROKERS NO. 1700-98 SUBJECT : Waterfront Philippines, Incorporated Attached is a copy of the announcement of Waterfront Philippines, Incorporated ("WPI") to the Exchange and the Securities and Exchange Commission (SEC) pertaining to the proposed extension of the exercise period of WPI's warrants, which was approved by its Board of Directors, in a meeting held on June 18, 1998. For your information. (SGD.) REYNOLD P. ONG Vice-President, Listings and Disclosure Group ANNOUNCEMENT OF WPI TO PSE AND SEC WATERFRONT PHILIPPINES, INCORPORATED ("WPI" OR "THE COMPANY") PROPOSED EXTENSION OF THE EXERCISE PERIOD OF WPI'S WARRANTS (PROPOSED EXTENSION OF WARRANTS") 1. INTRODUCTION The Board of Directors of WPI wishes to announce that the Board of the Company has on June 18, 1991 approved the proposed extension of the exercise period of WPI warrants from 36 months to 60 months, i.e. 5 years, thereby extending the expiry date of the warrants from May 2, 1999 to May 2, 2001. In this respect, the Company intends to seek the approval of the shareholders of WPI at the forthcoming Annual Stockholders' Meeting ("ASM") to be convened. The Company on May 3, 1996 issued 450,000,000 Rights shares with 225,000,000 warrants. Each warrant entitles its registered holder to subscribe for one (1) new share at any time at an exercise price of Pesos 3.50 per share for every warrant held over the subscription period commencing on May 3, 1996 and expiring on May 2, 1999 (36 months). 2. RATIONALE FOR THE PROPOSED EXTENSION OF WARRANTS Under the Rules on Warrants of the Securities and Exchange Commission, the exercise period of a warrant shall not exceed five (5) years. The warrant of WPI were issued with a three (3) year exercise period. LLphil Since its issuance, the economic outlook and environment in the Philippines has changed significantly. In view of the current economic and financial crisis affecting the ASEAN region which has destabilized the region's economics, the price of the underlying shares of WPI warrants are trading well below the exercise price of Pesos 3.50. It is therefore, not attractive for warrantholders to exercise these warrants. It is hoped that over a period of time, the financial turmoil may abate and thus it will be attractive for the warrantholders to exercise their warrants. In this connection, the Company is proposing to extend the exercise period of the warrants. Todate, a total of 61,315,000 warrants have been exercised leaving a balance of 163,685,000 warrants outstanding. On the assumption that all the outstanding 163,685,000 warrants will be exercised, the Company will receive an injection of funds of Pesos 572.9 million which will serve to enhance the future cashflow of the Company. As such, the Proposed Extension of warrants would be beneficial to both the Company and the warrantholders. 3. CONDITIONS TO THE PROPOSED EXTENSION OF WARRANTS The Proposed Extension of warrants is subject to the following approvals: (a) the shareholders of WPI at the forthcoming ASM to be convened; (b) the Philippine Stock Exchange ("PSE"); and (c) the Securities and Exchange Commission ("SEC"). Formal applications will be submitted to the PSE and SEC upon the approval or the shareholders of WPI. Under the Warrant Instrument, any modification to the warrants of WPI must be approved by the shareholders of WPI owning at least two-thirds of the outstanding shares, and requires the execution of a Supplementary Warrant Instrument. By order of the Board July 17, 1998 (SGD.) KHOO BOO BOON Director/Treasurer Waterfront Philippines, Incorporated