PSE Circular for Brokers No. 757-99

April 15, 1999 PSE CIRCULAR FOR BROKERS NO. 757-99 April 14, 1999 PHILIPPINE STOCK EXCHANGE PSE Center, Exchange Rd. Ortigas Center, Pasig City Attention: Grace B . de Guia Asst . Manager , Disclosure Department Eileen M . Lacorte Analyst , Disclosure Department RE : Fax Message to Guoco Holdings (Philippines) Inc . dated 12 April 1999 Mesdames : We reply to your letter dated 12 April 1999 requesting for clarification and further disclosure on the terms and conditions of the proposed issuance by the Company on a private placement basis of up to the US Dollar equivalent of P1.5 Billion worth of Convertible Bonds ("the Bonds"). Dates may vary depending on the actual Issue Date/s. The Company intends to issue, on a private placement basis, at 100% of their face value, US Dollar-denominated convertible and redeemable bonds due 26 April 2004. The aggregate principal value of all the Convertible Bonds will be equivalent to up to P1,500,000,000.00. Bondholders will be entitled to interest payments at the rate of 6.0% per annum, payable at the end of each prescribed semi-annual period from the relevant Issue Date. The first interest payment date is expected to occur on 26 October 1999. The terms and generally as follows: Unless previously converted, purchased and cancelled or redeemed, each Bond will mature on or about 26 April 2004 (regardless of the Issue Date), and will be paid a final redemption payment of 100% of the principal of the Bond plus an amount as will give the affected Bondholders an effective yield to maturity of 10.0% (net of tax) from the relevant Issue Date up to the Final Redemption Date. Unless already or in the process of being converted, purchased and cancelled, or redeemed, the Bonds may be converted beginning from the date of approval by the Company's shareholders of the creation of the Conversion Shares (up to P1.875 Billion worth of Preferred Shares or Common Shares as the case may be) into fully-paid, non-assessable, Common Shares of the Company, or first to Preferred Shares if the Conversion takes place on or before 26 April 2000, at the Conversion Price of P1.00 per share, based on the weighted average of all spot currency exchange transactions of the Philippines Peso against the U.S. Dollar posted by the Philippine Dealing System (PDS) (rounded off to the three decimal places) on the last business day immediately preceding the relevant Issue Date (the PDS Reference Rate"). aisadc Bondholders who elect to convert their Bonds on or before 26 April 2000, no mandatory conversion of the Bonds having occurred, will receive the equivalent number of Preferred Shares based on the Conversion Price of P1.00 per share, which Preferred Shares will have a zero coupon but be entitled to a cumulative one-time stock dividend of 25%, and all Preferred Shares inclusive of the stock dividends will thereafter be convertible into Common Shams on a one-on-one basis. These Bonds will first be converted into Preferred Shares within 60 days from the receipt of a notice of conversion, and thereafter may be converted into Common Shares within an additional 90 days. During such time, the Company will obtain the necessary corporate and regulatory approvals required. The Convertible Bonds are redeemable at the option of the Company (early redemption) beginning from the relevant Issue Date up to one year before Maturity Date, if the closing price of the Company's Common Shares in the PSE exceeds 130% of the Conversion Price of the shares during a period of 30 consecutive trading days prior to the exercise of the early redemption. The Bonds will be redeemed at 100% of their principal amount plus an amount to be determined by the Issuer as will give the Bondholders an effectivity to maturity of 10.0%(net of tax) computed from the relevant Issue Date up to date of redemption. cdlex All Outstanding Convertible Bonds will automatically be converted into Common Shares of the Company if the closing price of the Company's Common Shares in the PSE exceeds 150% of the Conversion Price during a period of 30 consecutive trading days prior to said conversion, at the equivalent amount of the Conversion Price of P1.00 per Conversion Share based on the PDS Reference Rate for the relevant Issue Date. Any Bondholder may require the Issuer to redeem the Outstanding Convertible Bonds at 100% of their principal amount plus an amount to be determined by the Issuer as will give the Bondholders an effective yield to maturity of 10.0% (net of tax) computed from the relevant Issue Date up to date of redemption, subject to the non-performance by the Issuer of certain undertakings of the Company including (i) failure or refusal to pay interest on the specified date within 60 calendar days from written notice by the Bondholder; (ii) purchase, redemption, retirement or acquisition by the Issuer of any of its Common Shares and failure by the Issuer to unwind the transaction within 60 days from written notice by the Bondholder; and (iii) inability to obtain all requisite regulatory approvals for the listing of the Underlying Conversion Shares within six months from Notice of Conversion. LLjur Please be informed that, to date, negotiations are still on going with the prospective subscribers to the Bonds. However, as mentioned above, the Company intends to issue the Convertible Bonds to a limited number of subscribers (no more than 19). The net proceeds to be received by the Company from the private placement issue will be used mainly for retirement of debt, capital expenditures and working capital requirements of the Company, its subsidiaries and its affiliates. Pending actual application of said funds, the net proceeds received by the Company may be invested in marketable securities, short-term loans and other short-term investments. We trust that the forgoing is sufficient for your purposes. Very truly yours, GUOCO HOLDINGS (PHILIPPINES), INC. By: (SGD.) DAISY L. BARKER Corporate Secretary