Cebu Shipyard and Engineering Works, Inc.

April 23, 1998 PSE CIRCULAR FOR BROKERS NO. 778-98 April 24, 1998 SUBJECT : Cebu Shipyard and Engineering Works, Inc . Cebu Shipyard and Engineering Works, Inc. ("CSE") informed the Exchange, in a letter dated April 22, 1998, that its Board of Directors has approved in principle the restructuring of CSE as follows: The corporate restructuring will be initialized by CSE by incorporating a wholly-owned subsidiary. The subsidiary will take over the shipyard operations of CSE in Cebu. CSE's wholly-owned subsidiary named "Keppel Cebu Shipyard, Inc." (hereafter referred to as "KCSI") was formally granted its legal existence by the Securities and Exchange Commission with One Hundred Thousand Pesos (P100,000.00) as authorized capital stock of KCSI. CSI subscribed and fully paid P25,000.00 The next step is for CSE to further transfer its assets into KCSI in exchange for its issuance of shares of stock. The asset-for-share swap transaction will enable CSE to have sole majority equity ownership and thus, making KCSI its wholly-owned subsidiary. The exchange will also include ceding the liabilities and obligations of CSE to KCSI. In turn, KCSI will issue its shares of stock to CSE. Prior to the asset-for-share swap, KCSI will increase its authorized capital stock to accommodate the said issuance. CSE will later abdicate its sole majority equity ownership in KCSI, by transferring its KCSI shares of stock to Kepphil Shipyard, Inc. (hereinafter referred to as "KSI") in exchange for the latter's issuance of shares of stock. KSI then will takeover all the shipbuilding and shiprepair operations of CSE by making KCSI its wholly-owned subsidiary. In the process thereof, Keppel Philippines Holdings, Inc. (hereinafter referred to as "KPHI") will offer the minority shareholders of CSE, who prefers to maintain and retain its investments in shipbuilding and shiprepairs, to exchange its shares of stock in CSE for KSI shares. The ratio will preserve the earnings per share of both CSE shareholders and KSI shareholders. MISSING PAGE