Manila Times news item on MBf Group

July 24, 1998 PSE CIRCULAR FOR BROKERS NO. 1710-98 July 22, 1998 PHILIPPINE STOCK EXCHANGE PSE Center, Exchange Road Ortigas Center, Pasig City Attention: Mr . Reynold P . Ong Vice President - Corporate Disclosures Listings and Disclosure Group SUBJECT : Manila Times news item on MBf Group Gentlemen : This acknowledges receipt of your fax message dated July 21, 1998. In reply, we wish to inform you that: 1. The court order which MBf Holdings Berhad obtained in the Malaysian High Court on 8 July 1998 was pursuant to section 176 of the Malaysian Companies Act. The said section enables applicant companies to present a scheme of arrangement to their creditors. The "protection from creditors" which is in the form of a restraining order is only for a period of six months to allow the creditors time to properly consider the proposed scheme. aisadc 2. The restructuring of MBf Holdings and its subsidiaries which has been ongoing for sometime includes a rationalization of the Group's businesses which will focus on financial services and the property sector. MBf Holdings is the Malaysian (KLSE) listed parent company of the MBf Group and the subsidiaries involved in the scheme are 13 Malaysian subsidiaries out of the Group's over 150 operating subsidiaries. 3. To restructuring of the Group's debt which is contained in the proposed scheme which was put to the creditors involves only banking and other lending institution creditors, four major creditors and excludes trade creditors. 4. The MBf Group, as part of its continuing restructuring exercise and in part also to meet some of its loan obligations has been disposing off certain assets including more recently, its education division, its Chrysler Jeep distribution company (MBf Commercial Vehicles) and its car rental company (MBf Pacific Rent A Car). 5. The sale of MBf Northern Securities is by MBf Capital Berhad and not MBf Holdings. MBf Capital is the financial services holding company of the MBf Group and is also listed on the KLSE. MBf Capital and its subsidiaries including MBf Finance are NOT part of the Scheme undertaken by MBf Holdings. 6. The Scheme of Arrangement undertaken by MBf Holdings in Malaysia does not involve and as such will have no bearing on the Company (MBf, Inc.) or any of the Company's operations here in the Philippines. The Company's loan and other creditor obligations will continue to be honoured and is not subject to any scheme of arrangement. MBf's operations in the Philippines will, subject to the constraint of the economic downturn, continue to be business as usual. cd Very truly yours, (SGD.) MARIO C. LORENZO Corporate Secretary