PSE Circular for Brokers No. 486-00

February 28, 2000 PSE CIRCULAR FOR BROKERS NO. 486-00 February 24, 2000 The Philippine Stock Exchange 4/F Philippine Stock Exchange Center PSE Center, Exchange Road Ortigas Center, Pasig City Attention: Ms. Grace P. de Guia Disclosure Department Gentlemen: We advise that at the Board of Directors' meeting held today, the Board authorized the increase of the Company's authorized capital stock from P60 million to P750 million divided into 750 million common shares with a par value of P1.00 each share. Such increase was previously authorized by the Company's shareholders at their annual meeting held on April 10, 1997 when they approved the increase in the Company's authorized capital stock from P60 million to an amount of not more than P5 billion, and authorized the Board to (a) determine whether such increase shall take the form of additional common shares, preferred shares and/or other types of securities and features thereof and (b) accept subscription of any third party to the proposed increase of the authorized capital stock in the form of cash and/or assets under such terms and conditions as may be approved by the Board. In connection with the increase in authorized capital stock, the Board approved that out of the proposed increase, 177,891,420 common shares (the "Rights Shares") at a par value of P1.00 per share shall be offered for subscription on the basis of 3.5 common shares for every share held, under a stock rights offer (the "Rights Offer") to stockholders of record as of a date to be fixed by the Board of Directors with the approval of the proper regulatory authorities. As part of the Rights Offer, the Board also authorized the issuance of 355,782,840 warrants ("Warrants") to subscribe to a total of 355,782,840 common shares (the "Warrants Shares") on the basis of one common share for each warrant held. Upon exercise, each Rights Share will be accompanied, free of charge, by two (2) detachable Warrants entitling the warrant holder to subscribe to one Warrants Share per Warrant. The Rights Offer with detachable Warrants shall have the following principal features. Rights Offering Rights Ratio: Three and one-half (3.5) rights for every one common share held as of record date Entitlement: Each shareholder as of record date will be offered the assignable right to subscribe to three and one-half (3.5) common shares (the "Right Shares") at the price of P1.00 per Right Share payable in full upon exercise of the right. Each Right Share shall be accompanied, free of charge, by two (2) detachable warrants (the "Warrants"). No fractional Right Shares nor Warrants will be issued. Subscription Price: P1.00 for each Right Share subscribed Record Date: To be set by the Company's Board of Directors in coordination with the Philippine Stock Exchange and Securities and Exchange Commission. Issue Date: The Right Shares shall be issued upon full payment of the subscription price and approval by the Securities and Exchange Commission of the application for increase in capital stock. Exercise or Offer Period: To be set by the Board of Directors at a maximum period of 60 days The Rights shall be transferable and assignable, subject to registration in the books of the transfer agent. Upon exercise, each Right Share shall be entitled to two (2) Warrants free of charge with the following principal features: Warrants Entitlement: Each warrant holder shall be entitled to subscribe to one common share(the "Warrants Shares") at the price of P1.00 per Warrant Payable in full upon exercise. The Warrants Shares shall be issued out of the increased authorized but unissued capital stock. Exercise Period: Not later than five (5) years after Issue Date Issue Date: Upon approval by the Securities and Exchange Commission of the registration statement and exercise of the Rights Shares. Exercise Price: During the first 2.5 years, the Exercise Price shall be P1.00 per Warrant. During the next 2.5 years, the Exercise Price shall be P1.50 per Warrant. The Warrants shall be transferable and assignable, subject to registration in the book of the Warrants Register. The Warrants shall be listed at the Philippine Stock Exchange. The Board also authorized the application for the registration and listing of the Rights Shares, Warrants and underlying Warrants Shares with the Securities Exchange Commission and Philippine Stock Exchange respectively. The funds raised through the Rights Offer with detachable Warrants are intended to be used for the retirement of the Company's existing loans, to fund the costs related to its reorganization and closure of the operations, and for investments in companies engaged in internet high-technology, leisure and entertainment-related business ventures. Very truly yours, (SGD.) ANA MARIA A. KATIGBAK Assistant Corporate Secretary Corp. Info. Officer in-charge