PSE Circular for Brokers No. 1950-98

August 24, 1998 PSE CIRCULAR FOR BROKERS NO. 1950-98 August 21, 1998 PHILIPPINE STOCK EXCHANGE, INC. Disclosure Department, Listing & Disclosure Group PSE Center, Exchange Road, Ortigas Center Pasig, Metro Manila Fax No. 636-0809 or 637-8811 Gentlemen : Thank you for your fax message dated yesterday regarding the news article appearing in the Philippine Journal on 19 August 1998 encaptioned "Hotel files claim vs. PAL," which, in essence, is correct. Due to the financial difficulties of PAL which have been publicly acknowledged, we have taken the advice of our lawyers in protecting our collections by filing formal claim with the SEC. The Holiday Inn Manila has provided room accommodations and meals to various PAL passengers and staff on official business totaling P4,243,817, the amount of which represents 7.65% of the hotel's total trade receivables as of 17 August 1998. On that same date, we registered our affidavit of claim with the SEC. On 19 August 1998, we received P900,000 from PAL as partial settlement of the claim. This brings our collectibles from PAL down to P3,343,817 at present. We are in constant communication with representatives of PAL, and expect settlement of this issue in due time. Management feels that the filing of claim will protect the hotel's interests and that the unpaid account of PAL will not materially affect the company's financial condition. In order to put the issue in perspective, we also enclose herewith a copy of an article published in the Philippine Daily Inquirer on 20 August 1998 entitled "Holiday Inn files claim against PAL". The article reports that aside from our firm, several other institutions have filed similar affidavits of claim with the SEC. Please note that these articles are not press releases on our part. Filings with the SEC are public documents that the press have access to. We thank you for the opportunity to clarify the matter in greater detail, for dissemination to the member-brokers and the investing public. We hope that everything is in order; please do not hesitate to get in touch with the undersigned should you need anything else. Thank you for your kind and immediate attention. Very truly yours, (SGD.) RICKY L. RICARDO Project Manager Holiday Inn files claim against PAL BY TINA ARCEO-DUMLAO HOTEL operator Acesite (Philippines) Hotel Corp., owner of the Holiday Inn Manila Pavilion, recently joined the growing list of service firms that have filed urgent claims against cash-strapped Philippine Airlines, Inc. Acesite, in a claim filed with the Securities and Exchange Commission, said PAL has an unpaid account of P4,243 million representing room accommodations and meals for its passengers and staff. "Payment for said claim has long become due but no payment has been made for the same, despite repeated representations and subsequent demands made by herein claimant's duly authorized representatives," Acesite said. Acesite agreed to provide PAL with hotel services under PAL's Stopover Manila Program. Since June, PAL has availed of room accommodations and meals for its passengers and staff on official business on a credit transaction. aisadc Acesite is the latest firm that has filed a complaint against PAL which has filed a petition with the SEC for the suspension of debt payments and the appointment of a rehabilitation receiver. PAL filed its petition last June and is scheduled to submit its draft rehabilitation plan by the end of next month. It accumulated over P85 billion in debt mostly due to its massive reflecting program. Fuel suppliers Petron Corp., and Mobil Philippines Inc. as well as an association of local music groups join the list of PAL claimants with over P700 million in past-due accounts. Documents submitted to the SEC showed that PAL owes Mobil P351,096 million for various lubes and bunker fuel products delivered from July 1997 to July this year. Mobil claims another $3,851 million or P154 million for bunker supply to PAL planes delivered in foreign ports such as Guam. Petron, on the other hand, estimates that PAL owes some P201,773 million in aviation fuel and lubricants as of end-June exclusive of interest. Japan Energy Corp., on the other hand, demands payment for at least $208,083 worth of fuel sold for May and June. LLjur The Filipino Society of Composers, Authors and Publisher has also filed a claim with the SEC worth P3.85 million representing unpaid royalties and license fees for unauthorized use of musical works/compositions belonging to its members.