PSE Circular for Brokers No. 2163-98

September 17, 1998 PSE CIRCULAR FOR BROKERS NO. 2163-98 September 16, 1998 PHILIPPINE STOCK EXCHANGE DISCLOSURE DEPARTMENT Listings & Disclosure Group PSE Center, Exchange Road Pasig City Gentlemen : During the press interview that took place after the special stockholders' meeting of RFM Corporation this morning, the President of the corporation, Mr. Jose Ma. Concepcion III, issued the following clarifications: 1. The increase in the capital stock of the corporation from P4.3 Billion to P5 Billion will pave the way for the entry of long-term financial and strategic investors in the corporation. These investors have expressed interest in buying shares of stock of the corporation and will do so in the event the stockholders of record will waive their right to subscribe to the new common shares that will be issued. These investors have signified their willingness to purchase up to 20% of the equity of the corporation. The terms and conditions of the purchase will be determined by the Board of Directors of the corporation. The money that will be raised which is estimated to be P3 Billion, will be used to pay down the corporation's debts and strengthen its balance sheet, while at the same time building a war chest for possible acquisitions in the future. 2. On the previously disclosed possible delisting of Swift Foods, Inc. and Selecta Dairy and Products, Inc., it was revealed that at this time, a possible option being considered is to provide the minority shareholders of said companies with an offer to swap their with RFM shares. In considering said swap, the current shareholders of Swift and Selecta will effectively be given the opportunity to benefit from any future appreciation of RFM stocks. The swap will give them the chance to shift their holdings to a broader food play rather than specific ice cream or meat play. Mr. Concepcion stated "we recognize the possibility that the plan to take the two firms private may not even happen if we are not able to get most shareholders of Swift and Selecta to move to RFM. In such case, we will allow the listing to continue." Mr. Concepcion further stated that RFM "would like to give the assurance that we are studying various ways where the minority shareholders will be given options which will be done in the most equitable manner one that will protect the interest of the shareholders of both SFI and Selecta." Should you need further clarifications, please do not hesitate to let us know. Very truly yours, (SGD.) CRISTINA D. REYES Asst . Corporate Secretary