Zeus Holdings, Inc. Comprehensive Corporate Disclosure

August 26, 1998 PSE CIRCULAR FOR BROKERS NO. 1981-98 SUBJECT : Zeus Holdings, Inc. Comprehensive Corporate Disclosure Further to Circular No. 1279-98 dated June 9, 1998 pertaining to the acquisition by Blue Circle Philippines, Inc. ("BCPI") and Round Royal, Inc. ("RRI") of the 57% shareholders of Far East Cement Corporation ("FECC") and Eagle Cement Corporation ("ECC") in Zeus Holdings, Inc. ("ZHI"), attached herewith is a corporate disclosure from ZHI on the following: I. Business and financial profile of Blue Circle Industries PLC; II. Discussion of the transaction among BCPI, RRI, FECC and ECC; III. Reasons for the disposals of FECC's and ECC's shareholdings in ZHI and the acquisition of BCPI and RRI; IV. Corporate and financial restructuring of ZHI; V. Company profile of RRI; VI. Discussion of the valuation of FECC's and ECC's shares in ZHI; and VII. Company Background (i.e., capital structure, ownership structure, financial statements, key officers, etc.) of the following entities: 1. Blue Circle Philippines, Inc.; 2. Far East Cement Corporation; and 3. Eagle Cement Corporation. The projected/pro-forma financial statements of ZHI with and without the investment of BCPI will be circularized as soon as ZHI submitted the same. cdlex Lastly, you may secure copies of the financial statements of the Company and the other parties to the transaction from the Library for reference. For your information. (SGD.) REYNOLD P. ONG Vice President, Listings and Disclosure Group ZEUS HOLDINGS, INC . CORPORATE DISCLOSURE 1. Business and financial profile of Blue Circle industries PLC Blue Circle Industries PLC ("BCI") is a corporation registered in England and in Wales, with registered office at 84 Eccleston Square, London, SWIVIPX, United Kingdom. It is engaged primarily in the world-wide manufacture and sale of heavy building materials and heating and bathroom products. Submitted on August 3, 1998 are BCI's financial statements/annual reports for the years 1996 and 1997. 2. Terms of the deal between BCI and the selling partners The acquisition of shares of Zeus Holding, Inc. ("Zeus") was made by Blue Circle Philippines, Inc. ("BCPI"), a wholly-owned subsidiary of BCI and Round Royal, Inc. ("RRI"), a Philippine corporation owned up to 40% by BCPI and its affiliate. As disclosed already to the PSE and the Securities and Exchange Commission ("SEC") on July 1, 1998, following are the terms of the acquisition: llcd a. BCPI acquired in cash at P0.27 per share 654,756,581 shares, inclusive of nominee-directors' shares, held by Eagle Cement Corporation (""ECC") and Far East Cement Corporation ("FECC") in Zeus, which resulted in BPCI"S owning around 40% of the total outstanding shares of Zeus; and BCPI acquired from FECC and ECC the following Zeus shares: Seller No. of Shares FECC 535,585,777 ECC 119,170,804 b. RRI acquired in cash at P0.27 per share 278,538,865 shares held by ECC in Zeus, resulting in RRI's ownership of 17% of the total outstanding shares of Zeus. 3. a. List of Major Stockholders (top 10) with shareholding percentages Please refer to Annex B attached prepared by Zeus' Stock and Transfer agent, Far East Bank and Trust Company. Table 1 also shows the share structure in Zeus before and after the acquisition based on the above report. b. Profile of Executive Officers Following are the directors and officers of Zeus as of July 1, 1998: ANTONIO A. SEQUERA Director/President MICHAEL A. FITCH Director/Chairman COLIN A. HUNTER Director GILBERT GARCIA Director ERIC MANALANG Director ROLAND MESA Director ANDRES B. STA. MARIA Director JOCELYN S. SALAZAR Director/Corporate Secretary MA. TERESA D. MERCADO Assistant Corporate Secretary 4. Plans and proposals of BCI BCI, through BCPI, does not intend to implement in the near future any major change in the business operations of Zeus. 5. Reasons for the disposal of majority shareholders The disposal of the shares by the selling stockholders was done basically to financially restructure Zeus. Together with the share acquisition, BCPI acquired a convertible note from Mindanao Portland Cement Corporation ("MPCC"), a wholly-owned subsidiary of Zeus, for P1.0 billion. The proceeds of the convertible note was used by MPCC to pay off partly its outstanding loan with Union Bank of the Philippines. The balance of the note proceeds is intended to finance working capital requirements and other capital expenditures of MPCC for its cement operations. Furthermore, the entry of BCI, through BCPI, in Zeus and indirectly in MPCC, will provide the strategic alliance required to move the cement business of MPCC forward. The investment of BCPI is expected to improve the financial and technical capability of Zeus and indirectly, MPCC, Zeus' wholly-owned subsidiary. For one, the investment was made on the basis of a commitment, and which commitment was already complied with, that BCPI will extend a P1.0 billion peso loan to MPCC. The proceeds of such loan was used to partially settle the obligations of MPCC with Union Bank of the Philippines. The balance, on the other hand, will be used to service the working capital requirements of MPCC. Secondly, with depressed market prices of cement and deteriorating peso-dollar exchange rate, which factors have jointly made it difficult for MPCC to service its existing loans, the entry of BCPI was considered very timely. The projected/pro-forma financial statements for Zeus with and without the investment of BCPI is still being prepared by the Company's internal auditor and will be submitted as soon as completed. 6. Zeus total number of issued and outstanding shares on which the percentage acquisition by BPCI in FECC and ECC in Zeus was based: 1,638,463,907 shares 7. Corporate and financial restructuring by Zeus, if any. LLjur See item 5 above. In addition and as already disclosed to the PSE and the SEC on July 1, 1998, a Put Option Agreement was executed between BPCI and Zeus covering the convertible note issued by MPCC in favor of BCPI in the principal amount of P1.0 billion and providing a firm put option in favor of BCPI/assignee to require Zeus upon notice to acquire such convertible note by either delivering new shares sufficient to cover the convertible note and all accrued interest thereon as of the payment date, or by paying the principal amount of the convertible note and all accrued interest thereon as of the payment date. 8. Reasons for the resignation of the Company's Directors In view of the change in control in Zeus as discussed in the preceding items, the previous nominee-directors of FECC and ECC had to resign. The new directors set out in item 3(b) represent the major stockholders in Zeus after the transaction. 9. Ownership structure of Zues before and after the acquisition Please refer to Annexes A and B attached hereto as prepared by Zeus' Stock and Transfer Agent, Far East Bank and Trust Company. 10. Profile of RRI Round Royal, Inc. was incorporated under Philippine law on February 5, 1998. Its primary purpose is: to engage in the business of trading of goods such as office equipment and plant machinery on wholesale basis. The capital structure of the corporation, pending the application by the corporation for an increase in its capital stock, is as follows: Authorized Capital Stock P681,808,400 Subscribed Capital Stock P170,452,100 Paid up Capital Stock P730,605,000 11. Terms of the deal between RRI and ECC Please refer to item 2 (b) above. 12. Share Valuation The valuation of P0.27 per share of FECC's and ECC's shares was arrived at without using any specific valuation method. It was based, among other things, on the purchasers' commercial estimate of the value of the current mineable limestone reserves of MPCC, the wholly-owned subsidiary of Zeus. 13. Company Profile of BCPI, FECC and ECC A. Blue Circle Philippines, Inc. Date of Incorporation: April 2, 1997 Nature of Business To provide management, technical, consultancy, and advisory services in cement manufacturing and distribution and related industries and all businesses as are associated, related or incidental thereto; to provide technical and administrative expertise with respect to design, specification, planning, construction, commissioning, evaluation, inspection, maintenance, management and operation of cement plants and any other activities incidental thereto, or in any way connected therewith. Authorized Capital Stock P5,266,400 (with application for increases still to be filed) Subscribed and Paid up P65,123,694 (as of December 31, 1997) Ownership Structure wholly-owned subsidiary of Blue Circle Home Products BV Board of Directors Michael A. Fitch Jeffery Pope Andres B. Sta Maria Cristina V. Uy Julito R. Sarmiento Principal Officers: President Michael A. Fitch Corporate Sec. Cristina V. Uy Affiliates: South Western Cement Ventures Round Royal, Inc. South Western Cement Corporation BCPI's financial statements for the year ended 1997 is transmitted herewith as Annex C. B. FAR EAST CEMENT CORPORATION TIN 320-002-436-04 Nature of Business To engage in, operate, conduct and maintain the business of manufacturing, importing, exporting, buying, selling or otherwise dealing in, at wholesale and retail such goods as: cement and its composition and other concrete products thereof, good of similar nature, and any and all equipment, materials, supplies, used or employed in or related to the manufacture of such finished products. SEC Registration Data Registration No. AS093-01300 Date of Incorporation February 17, 1993 Term 50-years Capitalization of inception Authorized capital P1,000,000.00 Subscribed Capital P250,000.00 Paid-up Capital P62,500.00 No. of Shares 25,000 Par value P10.00 Present Capitalization of Ownership Authorized Capital Stock P500,000,000.00 Subscribed Capital Stock P500,000,000.00 Paid up Capital Stock P500,000,000.00 No. of Shares 50,000,000 Par Value P10.00 Name of Stockholders No. of Shares % of Ownership Richard S. Lim 12,480,000 24.96% Ramon S. Ang 37,505,000 75.01% Dave M. Domingo 5,000 0.01% Thomas Tan 1,000 0.002% Ester R. Querido 5,000 0.01% Francis Chua 1,000 0.002% Sy Yap Chua 1,000 0.002% Virgilio S. Jacinto 1,000 0.002% Jose Perpetuo M. Lotilla 1,000 0.002% 50,000,000 100% ======== ====== Directors & Key Officers Name Nationality Position Held Ramon S. Ang Filipino Chairman/President Dave M. Domingo Filipino Corporate Secretary Francis Chua Filipino Director Sy Yap Chua Filipino Director Virgilio S. Jacinto Filipino Director Jose Perpetuo M. Lotilla Filipino Director Ownership Structure: Affiliates: None FECC's financial statements for the year ended 1996 is transmitted herewith as Annex D. C. EAGLE CEMENT CORPORATION TIN 004-731-637 Nature of Business To engage in the business of manufacturing, developing, processing, marketing, sale and distribution of cement, cement products and other by-products and, for this purpose, purchase and acquire, construct, erect and install machinery, equipment and plant facilities necessary or required for the manufacture and production of the products of the Corporation, locate, acquire, operate or otherwise dispose of mining claims and concessions containing lime, limestone, marble, granite and other raw materials and quarry, crush, mix or otherwise process such raw materials and undertake all such work for the development and exploitation of the said raw materials and, in general, to perform other acts necessary, appropriate or conducive for the pursuit of the primary purpose of the Corporation SEC Registration Data Registration No. AS093-005885 Date of Incorporation June 21, 1995 Term 50 year Capitalization at Inception Authorized Capital P2,000,000,000.00 Subscribed Capital P500,000,000.00 Paid-up Capital P125,000,000.00 No. of Shares 500,000,000 Par Value P1.00 Present Capitalization & Ownership Authorized Capital Stock P2,000,000,000.00 Subscribed Capital Stock P500,000,000.00 Paid up Capital Stock P125,000,000.00 No. of Shares 500,000,000 Par Value P1.00 Name of Stockholders No. of Shares % of Ownership Dave N. Floro 5,000,000 1% Manny C. Teng 300,000,00 60% Jocelyn P. Tan 75,000,000 15% Maylani Elcano 75,000,000 15% Mary Ann M. Ongsitco 45,000,000 9% 500,000,000 100% ========= ==== Directors & Key Officers Name Held Nationality Position Dave M. Floro Filipino Chairman Manny Teng Filipino President Jocelyn P. Tan Filipino Director Maylani Elcano Filipino Director Mary Ann Ongsitco Filipino Corp. Sec. Affiliates None ECC's financial statements for the year ended 1996 is transmitted herewith as Annex E. TABLE 1 TOP 10 STOCKHOLDERS BEFORE ACQUISITION as of 30 June 1998 RANK STOCKHOLDER NAME CERTIFICATE CLASS OUTSTANDING SHARES PERCENTAGE 1. FAR EAST CEMENT CORPORATION U 1,000,754,238 66.57% 2. EAGLE CEMENT CORPORATION U 397,709,669 24.27% 3. ASIAN APPRAISAL HOLDINGS, INC. U 55,000,000 3.36% 4. ABACUS SECURITIES CORPORATION U 31,499,999 1.92% 5. PERF REALTY CORPORATION U 20,000,000 1.22% 6. PCD NOMINEE CORPORATION U 18,381,234 1.12% 7. R. COYIUTO SECURITIES, INC. U 10,332,000 0.63% 8. LINDA H. BUGARIN U 2,325,006 0.14% 9. CUALOPING SECURITIES CORP. U 1,473,000 0.09% 10. SECURITY BANK CORPORATION U 1,250,000 0.08% TOP 10 STOCKHOLDERS AFTER ACQUISITION as of 17 July 1998 RANK STOCKHOLDER NAME CERTIFICATE CLASS OUTSTANDING SHARES PERCENTAGE 1. PCD NOMINEE CORPORATION U 673,766,803 41.12% 2. BLUE CIRCLE PHILS., INC U 654,756,577 39.96% 3. ROUND ROYAL, INC. U 278,538,865 17.00% 4. R. COYIUTO SECURITIES, INC. U 10,332,000 0.63% 5. FAR EAST CEMENT CORPORATION U 6,283,904 0.38% 6. LINDA H. BUGARIN U 2,325,006 0.14% 7. CUALOPING SECURITIES CORP. U 1,473,000 0.09% 8. SECURITY BANK CORPORATION U 1,250,000 0.08% 9. JF PHILIPPINE FUND TRUSTEE U 1,010,000 0.06% 10. PCD NOMINEE CORPORATION U 914,000 0.06%