PSE Circular for Brokers No. 706-99

April 8, 1999 PSE CIRCULAR FOR BROKERS NO. 706-99 April 7, 1999 Philippine Stock Exchange PSE Center, Exchange Road Ortigas Center, Pasig City Attention: Listing Department Listing and Disclosure Group Ladies and Gentlemen: Contrary to the attached report which appeared on Bloomberg, we wish to clarify that PLDT has no intention to absorb Pilipino Telephone Corporation ("Piltel") or to guarantee its financial liabilities. Piltel continues to have discussion with its creditors to achieve a mutually acceptable rehabilitation plan. With kindest regards. Very truly yours, (SGD.) LOURDES C. RAUSA-CHAN Corporate Secretary BN: 00:30 PLDT Says It's in Talks to Boost Piltel Stake, Guarantee Debts PLDT Says It's in Talks to Boost Piltel Stake, Guarantee Debts Manila, April 7 (Bloomberg) Philippine Long Distance Telephone Co., the country's largest phone company, said it's considering absorbing its mobile-phone company, said it's considering absorbing its mobile-phone subsidiary and guaranteeing its $900 million in debts. PLDT Senior Vice President Antonio Samson said the proposal being discussed with Pilipino Telephone Corp.'s creditors is part of a debt forgiveness package. LexLib "It was a recent option that was considered only two to three weeks ago," Samson said, "We felt we needed to take a dramatic option and put it on the table." Under that proposal, PLDT would swap its shares for additional stock in Piltel. That would raise its stake in Piltel to 99 percent from the current 50 percent. PLDT, which had argued that it isn't legally responsible for Piltel's debts, also would offer a guarantee to the mobile-phone unit's creditors. In exchange, Piltel's creditors would forgive some of its debts and restructure the rest. "There is a tug of war there" between the Piltel's desire for debt forgiveness and creditors' demand for a guarantee by PLDT, Samson said, "All the options entail some debt forgiveness from the banks." cdll Piltel shares fell 1.9 percent to 2.04 pesos, trimming gains over the past week to 31 percent. PLDT shares were unchanged at 1,025 pesos. --Marc R. Crows in the Manila bureau (632) 849-7144 through the Hong Kong newsroom (852) 2977-6600/iw Story illustration: PLTL PM <Equity> GPO D to graph the performance of Piltel's shares Company news: PLTL PM <Equity> Piltel TEL PM <Equity> PLDT SCIZ PM <Equity> Smart MPC PM <Equity> Metro Pacific 142 HK <Equity> First Pacific 5 HK <Equity> HSBC FEB PM <Equity> Far East MBT PM <Equity> Metrobank PCI PM <Equity> PCIBank DBK GR <Equity> Deutsche Bank CH1, BQ, CN News by category: NI ERN Earnings NI TLS Telecom Service