C & P Homes Gears Up for New Millennium Holds Talks with Creditors

October 27, 1999 PSE CIRCULAR FOR BROKERS NO. 2750-99 C & P HOMES GEARS UP FOR NEW MILLENNIUM HOLDS TALKS WITH CREDITORS As part of a comprehensive plan to overcome the adverse impact of the regional crisis and to position itself to take advantage of the anticipated full recovery of the Philippine economy, C & P Homes, Inc., the country's largest homebuilder, is holding discussions with its creditors to seek revised debt terms. "We hope to put in place all requirements of the comprehensive plan soonest. And as we move with efficiency and prudence, we should be well-positioned, as the new century sets in, to stay dominant with a healthy balance sheet", C & P Homes Chairman Sulficio O. Tagud, Jr. said. The Company's debt stock includes a $ 150 million floating rate note (FRN), a PhP 3.0 billion long term commercial paper (LTCP) and PhP 5.0 billion owed to various domestic banks. In a series of meeting with its creditors, C & P Homes has requested its creditors to appoint representatives to a steering committee that would take the lead in the restructuring process. C & P Homes today, also notified its creditors, the SEC and PSE that it is deferring payments on all its obligations pending the completion of the comprehensive restructuring program. The restructuring program is part of the various initiatives undertaken by the Company aimed at strengthening its capabilities to face new challenges and seize fresh opportunities in the resurging property business in the new millennium. Earlier, C & P announced a 200% increase in its authorized capital from P 5.0 billion to P 15.0 billion. In addition, the Company has drastically reduced personnel and facilities costs, changed its business focus, and monetized part of its landbank in an effort to reduce debts. These steps have yielded significant benefits in terms of a positive operating cash flow, a sizable cut in total debt and an increase in tangible net worth as a result of equity infusions amounting to P3.8 billion to date. As with the entire real estate industry, C & P Homes was buffeted by the regional financial crisis. The combination of the peso devaluation, high interest rate, revised and rigid terms of the government's shelter program which dried up funding for socialized and cost housing projects, and overall tight liquidity greatly reduced the volume of business and increased operating costs.