ATI shareholders approve fresh equity infusion

August 13, 1998 PSE CIRCULAR FOR BROKERS NO. 1881-98 ATI shareholders approve fresh equity infusion Optimistic of the company's growth prospects shareholders of the publicly-listed Asian Terminals, Inc. yesterday approved company's proposals for a P1 billion rights issue and an increase in capital stock from P1.2 billion to P4 billion. Major shareholders All Asia Capital Consortium, P&O Australia Ltd., and Mitsui & Co. Ltd also expressed conviction in the new Philippine government under the guidance of President Estrada to recommend the full subscription of the rights issue. Board Chairman Capt. Richard Setchell and President Eusebio Tanco assured shareholders that the equity infusion will address both the short-term and the long-term requirements of the company. LLpr Setchell said the rights issue of P1 billion will be used for expansion of the South Harbor, for which the government extended ATI's contract for another six years, renewable for an additional 25 years. Business units that are also up for expansion are the Mariveles Grains Terminal in Bataan, the Inland Clearance Depot & Logistics Center in Calamba, Laguna and the international Port of Batangas in Batangas City. "Other projects are also being evaluated," he added. "The more notable of these are a new port in Cagayan do Oro and an oil tank facility in Mariveles, Bataan." Setchell stressed that minority of the proceeds will be used for the immediate liquidation of existing short term loans which currently carry high interest rates as a direct result of the currency crisis in Asia. "Liquidating these loans will immediately improve your Company's profitability," he addressed shareholders, "as substantial interest charges will be eliminated and replaced with equity funding." "It is therefore easy to see that the synergistic effect of the infusion, benefits both the short term through higher profitability, and the long term through a stronger capital base for expansion," he noted. The company, which has immediately countered the effects of peso devaluation with massive cost-cutting measures, assured shareholders that it will continue reduction of operating costs until the business atmosphere normalizes. "We will still continue to pursue cost containment in all areas of our operations, without losing sight of business opportunities that will present themselves," he concluded.