Acesite (Phils.) Hotel Corporation

September 17, 1999 PSE CIRCULAR FOR BROKERS NO. 2339-99 SUBJECT : Acesite (Phils.) Hotel Corporation Acesite (Phils.) Hotel Corporation ("DHC") furnished the Exchange a copy of the Addendum to Quarterly Report for the period ended June 30, 1999, relative to its default in payment of its US$15 Million loan from the Industrial and Commercial Bank of China (ICBC)-Singapore branch, which matured on 31 March 1998. DHC also reported a breakdown of its accounts payable and accrued expenses as of 30 June 1999. prcd Attached is a copy of DHC's Addendum to Quarterly Report for your reference. For your information. (SGD.) JOSE LUIS U. YULO, JR. President and CEO SECURITIES AND EXCHANGE COMMISSION SEC Form 11-Q Quarterly Report Pursuant to Section 11 of the Revised Securities Act and RSA Rule 11(a)-1(b)(2) Thereunder 1. For the Quarter ending 30 June 1999 (1st Quarter of the 1999-2000 Fiscal Year) 2. Commission Identification Number (SEC Registration No) 7199 3. BIR TIN 002-856-627 4. Acesite (Phils.) Hotel Corporation 5. Philippines 6. Industry Classification Code: 7. Room 527, Holiday Inn Manila, United Nations Avenue, Ermita, Manila 1000 8. Telephone Number (632) 526-1212 local 2403 9. Former Name: Delbros Hotel Corporation Former Address: Delbros Suites, 22nd Floor, Manila Hilton, UN Ave., Former FY: January - December 10. Common Stock (P1.00 par value) as of 31 March 1999 Authorized 300,000,000 shares Issued 99,852,308 shares Preferred Stock (P500.00 par value) as of 31 March 1999 Authorized 20,000 shares Issued None 11. The above common shares are listed on the Philippine Stock Exchange. 12. The corporation has filed the Consolidated Quarterly Reports to the SEC and the PSE for the past year. 13. Addendum required per SEC MMOD letter dated 19 August 1999: a. Disclosure required by Part VII(a)(1)(E) of RSE Rule 48: The Corporation has committed an event of default with respect to the payment of its US$15 Million loan from the Industrial and Commercial Bank of China (ICBC) Singapore Branch, which matured on 31 March 1998. South Sea Development Co., Ltd. (SSD), a Hong Kong based affiliate, has paid three (3) interest payments of US$412,551 each to ICBC on behalf of the company on 30 June 1999, on 31 July 1999 and on 31 August 1999. On behalf of the company, SSD has committed to pay on 30 September 1999 all remaining overdue interest on the loan to ICBC. llcd b. Disclosure required by Part VII(a)(2)(C) of RSA Rule 48: Not applicable; the Corporation has not entered into a business combination treated for accounting purposes as a pooling of interest during the quarter ending 30 June 1999. c. Disclosure required by Part VII(a)(2)(D) of RSA Rule 48: Not applicable; the Corporation has not entered into a business combination treated for accounting purposes as a pooling of interest during the quarter ending 30 June 1999. LibLex d. Disclosure required by Part VII(a)(2)(E) of RSA Rule 48: Not applicable; the Corporation has not disposed of any significant segment of its business during the quarter ending 30 June 1999. e. Disclosure required by Part VII(a)(2)(F) of RSA Rule 48: Not applicable; the Corporation has not made any material accounting change during the quarter ending 30 June 1999. f. Disclosure required by Part VII(a)(2)(G) of RSA Rule 48: Not applicable; the Corporation has not made any material retroactive prior period adjustment during the quarter ending 30 June 1999. g. Disclosure required by Part VII(a)(2)(H) of RSA Rule 48: The unaudited financial statements for the quarter ending 30 June 1999 reflects all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. llcd h. Breakdown of Accounts Payable and Accrued Expenses (30 June 1999): Accounts Payable Trade 6,244,255 Accounts Payable Others 7,948,755 Accrued Taxes Payable 43,698,640 Accrued Retirement 3,394,943 Accrued Salaries/VL/SL 18,113,144 Accrued Expenses 52,510,052 Other Accrued Liabilities 4,246.418 Total 136,156,207 There are no special arrangements for DOSRI. i. Details of Loans Payable: Name of Creditor Industrial and Commercial Bank of China Singapore Branch Loan Amount US$15 Million Credit Facility Loan Payable P570,900,000 (@38.06 FX Rate) Interest Rate Prime rate plus 2% spread Maturity Date 31 March 1998 Collateral Mortgage Trust Indenture over land and building comprising the Holiday Inn Manila MTI Trustee Metropolitan Bank & Trust Company Trust Banking Group j. Earnings Per Share for the quarter ending 30 June 1999: P0.15 k. Additional discussion on the event of default: The Philippines was affected by the Asian currency crisis resulting to a significant depreciation in the value of the peso against the U.S. dollar, high interest rates and tight financial credit. The significant depreciation of the peso has substantially increased the outstanding balance of the Corporation's U.S. dollar-denominated loans in terms of pesos, resulting in substantial foreign exchange losses. The Corporation's unrealized foreign exchange loss on its dollar loan amounted to P15.03 Million in the fiscal year ending 31 March 1999, P171.75 Million in the fiscal year ending 31 March 1998 and P2.55 Million in the fiscal year ending 31 March 1997. llcd With the depreciation of the peso, the Corporation's financing costs have risen substantially from P51.03 Million in the fiscal year ending 31 March 1997, to P60.59 Million in the fiscal year-ending 31 March 1998, to P82.15 Million in the fiscal year ending 31 March 1999. On 1 June 1999, the Corporation received notice from Rajah & Tann, the legal counsel of ICBC, informing the Corporation that it has committed an event of default and indicating its demand for payment of the US$15 Million credit facility granted by the bank to the Corporation. SSD guaranteed to provide the Corporation the necessary amount to liquidate the loan, arrange for rollover, extension, rescheduling, restructuring or refinancing of the loan in order to cushion the effects on the operations of the Corporation. In a meeting held on 31 May 1999 among the Company, SSD and ICBC, SSD proposed the following repayment schedule of all interest due: $412,551 on or before 30 June 1999, 31 July 1999 and 31 August 1999, and all outstanding overdue interest on or before 30 September 1999. SSD has paid three (3) payments of $412,551 each for past due interest on 30 June 1999, 31 July 1999 and 31 August 1999. ICBC and SSD have agreed that upon full payment of the interest due on 30 September 1999, the repayment date of the loan will be extended. Upon such extension, it is expected that the financial condition of the Company will stabilize. cdlex Acesite (Phils.) Hotel Corporation By: (SGD.) RICKY L. RICARDO Manager, Corporate Affairs (1 September 1999)