PSE Circular for Brokers No. 643-99

March 30, 1999 PSE CIRCULAR FOR BROKERS NO. 643-99 SECURITIES AND EXCHANGE COMMISSION SEC FORM 11-C CURRENT REPORT UNDER SECTION 11 OF THE REVISED SECURITIES ACT (RSA) AND RSA RULE 11(a)-1(b)(3) THEREUNDER 1. March 29, 1999 Date of Report (Date of earliest event Reported) 2. SEC Identification Number CE-02536 3. BIR TIN 003-028-269-V 4. ABOITIZ EQUITY VENTURES, INC. Exact name of registrant as specified in its charter 5. Cebu City, Philippines Province, country or other jurisdiction of incorporation 6. Industry Classification Code 7. Archbishop Reyes Ave., Banilad, Cebu City 6000 Address of principal office Postal Code 8. (032) 2310-705 Registrant's telephone number, including area code 9. N.A. 10. Securities registered pursuant to Sections 4 and 8 of the RSA Title of each Class Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding Common Stock P1.00 par value Amount of Debt Outstanding 11. Indicate the item numbers reported herein: 6 In compliance with the disclosure requirements of both SEC and PSE, please find below texts of resolutions passed and adopted by the Board of Directors of AEV on its meeting hold today, March 29, 1999: Item 6 CHANGES IN SECURITIES A. Authorizing the amendment of Article VII of the Articles of Incorporation of the Corporation . "Resolved, that Article VII of the Articles of Incorporation of the Corporation be amended so that as amended said Article shall read as follows: ARTICLE VII. That the authorized capital stock of the Corporation is FOURTEEN BILLION (P14 , 000,000,000.00) . and said capital stock divided into : I. Ten Billion (10 , 000 , 000 , 000) COMMON SHARES with a par value of One Peso (P1 . 00) per share : II. Four Billion (4 , 000 , 000 , 000) PREFERRED SHARES with a par value of One Peso (P1 . 00) per share . PREFERRED shares shall be non-voting , non-convertible , redeemable and may be issued from time to time by the Board in one or more series . The designations , relative rights , references and limitations of the PREFERRED shares and/or particularly the shares of each series thereof , may be similar to or may differ from those of any other series . The Board of Directors is hereby expressly authorized to issue from time to time PREFERRED shares in one or more series and to fix from time to time before issuance thereof , the number of shares in each series , and all designations , relative rights , preferences and limitations of the shares in each series subject to the provisions of this Article . PREFERRED shares that are redeemed by the corporation may be re-issued that holders thereof are entitled to receive dividends payable out of the earned surplus profit of the corporation as the Board of Directors may , by resolution , determine with due notice to the SEC : such dividends or series of dividends may be cumulative as determined by the Board of Directors by resolution : In the event of any liquidation or dissolution or winding up (whether voluntary or involuntary) of the corporation , the holders of the PREFERRED shares shall be entitled to be paid in full the par value of their shares before any payment in liquidation is made upon the holders of the COMMON shares . LexLib No holder of shares of the capital stock of any case of the corporation shall have any pre-emptive or preferential right of subscription to any shares of any class of stock of the corporation , whether now or hereafter authorized , or to any obligations convertible into any stock of the corporation , issued or sold nor any right of subscription to any thereof other than such , if any , as the Board of Directors in its discretion may from time to time determine and at such price as the Board of Directors may from time to time set . "Resolved, further, that these amendments to Article VII of the Corporation's Articles of Incorporation, be as it is hereby is submitted to the stockholders for approval and ratification at the Annual Stockholders' Meeting on May 10, 1999." Additional Information Increase of Authorized Capital Stock and Issuance of PREFERRED Shares: 1. If the constituent instruments defining the rights of the holders of any class of registered securities have been materially modified, give the title of the class of securities involved and state briefly the general effect of such modification upon the rights of holders of such securities. No modification on the rights, privileges, of holders of Common Shares except as to that stated in 2. LLpr 2. If the rights evidenced by any class of registered securities have been materially limited or qualified by the issuance or modification of any other class of securities, upon the rights of the holder of the registered securities. The Issuance of PREFERRED shares shall grant holders of PREFERRED shares the right to be paid in full of the par value of their shares before any payment is made upon the holders of the COMMON shares, in the event of any liquidation or dissolution of the corporation (whether voluntary or involuntary). 3. Discussion on the impact of the events on the registrant's ( illegible portion in Philippine Stock Exchange file ) future operations, its financial position or results of operations ( illegible portion in Philippine Stock Exchange file ) by SEC Memo Circular No. 5). The PREFERRED shares when issued are intended to displace existing or prospective debts. As the PREFERREDS are expected to be a cheaper alternative of financing the company's Investments, the financial impact should be positive. However, until the shares are placed, we cannot determine the exact benefit Item 9. OTHER EVENTS 9. Goodwill Write-Off "Resolved, as it hereby resolved, that the amount of PESOS: FIVE HUNDRED TWENTY ONE MILLION SIX HUNDRED EIGHTY THREE THOUSAND ONE AND 23/100 (P521,683,001.23/100) representing the remaining goodwill for all portfolio investments as of December 31, 1998, be written off, as it hereby written off against the extraordinary earnings from the sale of other portfolio investments, specially Republic Cement Corporation and Pilipinas Kao, in 1998." LLjur Additional Information As part of the company's core business focus strategy, the Boards of Directors of Aboitiz Equity Ventures agreed to a one-time charge of all remaining goodwill for its portfolio investments, instead of the gradual amortization be the remaining corporate lives of the respective lives of the respective investments. The amount of 521.6 million pesos representing the remaining goodwill for all portfolio investments as of December 31, 1993 will be written-off against the extraordinary earnings from the sale of other portfolio investments, specially Republic Cement and Pilipinas Kao, in 1998. The write-off will eliminate over 13 million pesos in annual goodwill amortization and improve recurring earnings by the same amount. C. Approval of the Audited Financial Statements "Resolved, as it hereby resolved, that the Corporation's Audited Financial Statements as of December 31, 1998, be approved, as it hereby approved." Additional Information Aboitiz Equity Ventures posted a net income in 1998 of 1.031 billion pesos an increase of 34% over the previous year's earnings. The largest container from its wholly owned subsidiary, Aboitiz Power Corporation, with 633 million pesos in earnings, up 48% from 1997. The financial services subsidiaries improved slightly contributing 419 million pesos, 1% better than in 1997. ( illegible portion in Philippine Stock Exchange file ) investments of 74 million, while parent company income added 69 million for total recurring earnings of P1.067 billion pesos. Net non-recurring income and charges, inclusive of the goodwill write-off, reduced the total to 1.031 billion. SIGNATURE(S) Pursuant to the requirements of the Revised Securities Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ABOITIZ EQUITY VENTURES, INC. By: (SGD.) JESUS A. SANTIAGO Corporate Secretary