PSE Circular for Brokers No. 1773-99

July 19, 1999 PSE CIRCULAR FOR BROKERS NO. 1773-99 SECURITIES AND EXCHANGE COMMISSION SEC FORM 11-C CURRENT REPORT UNDER SECTION 11 OF THE REVISED SECURITIES ACT (RSA) AND RSA RULE 11(a)-1(b)(3) THEREUNDER 1. July 15, 1999 Date of Report (Date of earliest event reported) 2. SEC Identification Number ASO-94-00011164 3. BIR Tax Identification No. 004-504-224 4. C & P HOMES, INC. Exact name of registrant as specified in its charter 5. Philippines Province, country or other jurisdiction of incorporation 6. [ ] (SEC Use Only) Industry Classification Code: 7. Camella Centre, National Road, Las Pias City Address of principal office Postal Code 8. (632) 874-57-58 Registrant's telephone number, including area code 9. Not Applicable Former name or former address, if changed since last report 10. Securities registered pursuant to Sections 4 and 8 of the RSA Title of Each Class Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding Common Stock P1.00 Par Value 4,164,046,929 11. Indicate the item numbers reported herein: Item 9 Item 9 . Other Events (a) In the special meeting of the Board of Directors held on July 15, 1999, the Board of Directors of the Corporation approved the increase in authorized capital stock of the Corporation from P5,000,000,000 divided into 5,000,000,000 shares with a par value of P1.00 per share to P15,000,000,000 divided into 15,000,000,000 shares with a par value of P1.00 per share. (b) In the same meeting, the Board of Directors authorized the Corporation to issue and sell, at par, the remaining authorized capital stock of the Corporation of P864,000,000 divided into 864,000,000 shares with a par value of P1.00 per share to such investor and under such terms and conditions as may be acceptable to the Corporation. dctai (c) Subject to the approval by the stockholders of the proposed increase in the authorized capital stock of the Corporation, the Board approved the subscription of Fine Properties, Inc. and Adelfa Properties, Inc., out of the proposed increase in the authorized capital stock of the Corporation, of up to P3,800,000,000 worth of shares at a price equivalent to the par value of such shares to be paid for in cash, shares of stock of other corporation or other properties acceptable to the Corporation. (d) Finally, the Board of Directors scheduled a meeting of the stockholders of the Corporation on September 3, 1999 for the purpose of submitting the proposed increase in authorized capital stock for the approval of the stockholders. SIGNATURES Pursuant to the requirements of the Revised Securities Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. C&P HOMES, INC. Registrant By: (SGD.) GEMMA M. SANTOS Corporate Secretary Accompanying Statement on C&P Homes, Inc.'s Report to the SEC/PSE The Board of Directors of C&P Homes, Inc. in its meeting on July 15, 1999 approved the increase in the Company's authorized capital stock from P5 billion (divided into 5 billion shares at P1 par value per share) to P15 billion (divided into 15 billion shares at P1 par value per share). On the basis of the proposed increase in authorized capital stock, the Board approved the issuance and sale of up to P3.8 billion worth of shares at P1 par value per share to the Company's majority shareholders. At the same meeting, the Board authorized the issuance and sale of the remaining 835.95 million unissued shares of the authorized capital stock of the Company at P1 par value per share. The Company said that existing stockholders and new investors have expressed interest in subscribing to the remaining unissued shares of the Company. These subscriptions would increase the equity of the Company to P13.7 billion and would more than offset the decrease in its stockholders' equity resulting from the net loss incurred by the Company in 1998. cdlex For 1998, the Company reported an operating profit of P175 Million, down 86% from P1.2 Billion in 1997. The decrease in operating profits, however, was due mainly to a redefinition of its accounting policy on gross profit recognition dictated by a change in the housing loan guidelines of the Government's mortgage program. Real estate sales of the Company for 1998 amounted to P3.6 Billion, down only 13% from P4.2 Billion in 1998. However, recognition of gross profits from such sales amounting to P876 Million was deferred, compared to a deferred gross profit of only P448.8 million in 1997 on sales of P4.2 Billion. While the Company's operations for 1998 yielded positive results, the Company still reported a net loss of P3.4 Billion due mainly to interest expenses amounting to P1.59 Billion and unusual and non-recurring charges amounting to P3.3 Billion. The unusual and non-recurring charges represent reversals of receivables from sales which have been cancelled either because the buyers have backed out or because the buyers have failed to qualify under the more stringent loan guidelines of the Government. These charges represent a one-time loss and the Company does not expect to incur the same loss item in succeeding years as it has revised the rules in the selection of buyers. For the quarter ended March 31, 1999, the Company already reported favorable results in its operations.