PSE Circular for Brokers No. 2767-98

December 16, 1998 PSE CIRCULAR FOR BROKERS NO. 2767-98 December 15, 1998 Philippine Stock Exchange, Inc. PSE Center, Exchange Road Ortigas Center, Pasig City Attention: Ms . Janet J . Alcala Analyst, Disclosure Department Relative to the news article at Business World dated today, December 15, 1998 entitled "C & P Homes Eyes Property Swap to Settle P5 Billion Debt", we would like to clarify the following points: 1. C & P Homes (hereinafter referred to as Company) is current in all its obligations. 2. The management has never considered any plan to seek debt moratorium with SEC. 3. The idea of Dacion en Pago which was discussed; since three to four months with creditors that accommodated the company on clean basis, was in earnest desire of the company to settle its obligations long before it expects some cash flow problem brought about by the depressed property market. 4. The Company has P17 billion book value of real estate (not P13 Billion as reported in the article). Even at today's depressed prices, these properties' estimated market value is P28 Billion considering some of these properties were acquired several years ago. 5. Part of the expected cash flow problem is due to the lack of government's funding for low cost housing that left the company with substantial level of receivables. 6. The Company's balance sheet remains sound. The dacion offered to its clean short term creditors is designed to maintain the level of working capital required for its continuing operation. Please be informed also that PNB has no exposure to the Company. We hope that we have clarified most of your concerns. LexLib Please feel free to call on the undersigned for any further question. Very truly yours, (SGD.) JERRY M. NAVARRETE President C & P Homes