JG Summit Holdings, Inc. Record Date and Work Program for 1:2 Stock Rights Offering

April 24, 1998 PSE CIRCULAR FOR BROKERS NO. 816-98 SUBJECT : JG Summit Holdings, Inc. Record Date and Work Program for 1:2 Stock Rights Offering Further to Stock Rights Notice No. 27, please be informed that the record date of the 1:2 Stock Rights Offering of JG SUMMIT HOLDINGS, INC. has been set on May 15, 1998 . The details are as follows: Ratio : one (1) offer share for every two (2) outstanding common shares held Offer shares, par value : 2,060,921,728 to 2,108,212,728 common shares, 1 P1.00 per share Offer price : P1.00 to P5.00 per share Record Date : May 15, 1998 Ex-date : May 8, 1998 Offer Period : Start: June 8, 1998 End: June 19, 1998 Price Fixing Date and Determination of number of shares to be offered : May 6, 1998 Subscription : Each stockholder of record shall be required to apply to subscribe to his Total Offering Allocation over four tranches with an approximately equal number of offer shares applied for subscription in each tranche. The stockholder of record shall provisionally determine the number of offer shares to be applied for subscription in each tranche as follows: If the total number of offer shares applied for subscription (the Total Offering Application) is divisible by four, then the stockholder of record shall be required to apply to subscribe in each of the four tranches to a number of offer shares equal to one fourth of his Total Offering Application, determined using the following computation: If the Total Offering Application divided by four (the Provisional Tranche Calculation Shares) is a whole number, then the stockholder of record's Provisional First Tranche Shares, "Provisional Second Tranche Shares," "Provisional Third Tranche Shares," and "Provisional Fourth Tranche Shares" shall each be equal to the Provisional Tranche Calculation Shares. Otherwise, if the Total Offering Application is not divisible by four, then the Stockholder of Record shall be required to accumulate the fractional shares that result from dividing the Total Offering Application by the four tranches and add the sum of the fractions to the number of offer shares to be applied for subscription in the first tranche, using the following computation: If the Provisional Tranche Calculation Shares is not a whole number, then the Provisional First Tranche Shares shall be equal to the sum of (i) the whole number portion (if any) of the Provisional Tranche Calculation Shares; and (ii) the product-of four-and the fractional portion of the Provisional Tranche Calculation Shares. The Provisional Second Tranche Shares, Provisional Third Tranche Shares, and Provisional Fourth Tranche Shares shall each be equal to the whole number portion (if any) of the Provisional Tranche Calculation Shares. Notwithstanding the foregoing, the final computations of each stockholder of record's Total Offering Allocation shall be completed only after the Receiving Bank tallies all Total Offering Applications. Consequently, the number of offer shares eventually subscribed to in each tranche may be less than what was applied for. Payment Terms : The "First Payment" due on the First Payment Due Date shall be the sum of the full payment for the Provisional First Tranche Shares and 25 percent of the full payment (each a "Deposit") for the Provisional Second Tranche Shares, Provisional Third Tranche Shares and Provisional Fourth Tranche Shares. The Deposits are non-interest bearing and will be applied towards payment for the Final Second Tranche Shares, Final Third Tranche Shares, and Final Fourth Tranche Shares. The "Second Payment", "Third Payment" and "Fourth Payment" shall each be the remaining balance (after deducting the Deposits included in the first payment) of the full payment for the Final Second Tranche Shares, Final Third Tranche Shares, and Final Fourth Tranche Shares, respectively, each to be paid on the relevant Payment Due Dates. Projected Payment : Payment Due Dates Schedule First Tranche: June 11, 1998 Second Tranche: December 14, 1998 Third Tranche: June 17, 1999 Fourth Tranche: December 14, 1999 Underwriter : PCI Capital Corporation Receiving Bank/ Custodian Bank/ Stock Transfer Agent : Far East Bank and Trust Company The net proceeds of the Stock Rights Offer, estimated to be approximately P2,050,195,431 to P10,338,760,263, based on 2,108,212,728 Offer Shares, after deduction of the applicable taxes, fees and expenses related to the Offering, will be used to finance construction and expansion programs of its three subsidiaries namely, JGS Petrochemicals, APO Cement Corporation and Universal Robina Corporation. The proposed breakdown is as follows: Percentage JGS Petrochem Corporation 50% Apo Cement Corporation 30% Universal Robina Corporation 20% Total 100% Attached as Annex "A" is a copy of the Company's 1998-1999 forecasted financial statements. For your information and guidance. (SGD.) REYNOLD P. ONG Vice-President, Listings and Disclosure Group JG SUMMIT HOLDINGS, INC . ASSUMPTIONS TO PROJECTED FINANCIAL STATEMENTS 1. Excess cash is invested in temporary cash investments with interest computed at 20% per annum or 16% net of 20% final tax. 2. It is assumed that there will be no additional acquisitions or disposals of marketable securities. 3. Receivables and accounts payable and accrued expenses are assumed to increase by 10% per annum. Other assets is assumed to increase by 2% per annum. 4. Additional office condominium units acquired in 1995 amounting to P175 million were depreciated starting 1998 (first year of occupancy). prLL 5. It is assumed that additional capital infusion due to stock rights offering is made during the third quarter of 1996. The net proceeds will be advanced to JG Petrochem, Apo Cement and URC. 6. Equity in net earnings from subsidiaries which include food and agro-industrial, real estate and hotels, telecommunications, petrochemicals and cement were computed based on their projected financial statements. 7. Other income was projected to increase by 10% per annum except that there will be no gain on sale of marketable securities. (see assumption no. 2) 8. Administrative expenses were projected to increase by 15% per annum. JG SUMMIT HOLDINGS, INC . PROJECTED BALANCE SHEETS (Parent Company) In Thousand Pesos 1998 1999 ASSETS Current Assets Cash and Temporary cash investments 115,604 45,151 Marketable securities 171,489 171,489 Receivables 263,991 290,390 Other current assets 28,721 28,721 Total Current Assets 579,805 535,751 Equity Investments 48,237,057 53,724,007 Due from Affiliated Companies 11,834,370 11,834,345 Land 37,268 37,268 Office Condominium Units net of accumulated depreciation 213,232 201,126 Other Assets 1,181,925 682,814 62,083,657 67,015,311 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Loans payable 2,368,208 2,000,000 Accounts payable and accrued expenses 488,842 537,726 Current portion of long-term commercial paper - Total Current Liabilities 2,857,050 2,537,726 Long-term commercial papers 2,500,000 2,500,000 Due to Affiliated Companies 16,451.747 14,615,737 Subscriptions Payable 432,938 432,938 Deferred Credits and Other Liabilities 2,307,892 2,307,892 24,549,627 22,394,293 Stockholders' Equity Common Stock 5,270,532 6,324,638 Additional paid-in capital 4,923,023 5,918,917 Deposit for future subscription 512,500 - Accumulated translation adjustment - - Retained earnings 27,523,622 33,073,110 Treasury shares (695,647) (695,647) 37,534,030 44,621,018 62,083,657 67,015,311 ========== ========= JG SUMMIT HOLDINGS, INC . PROJECTED BALANCE SHEETS (Parent Company) In Thousand Pesos 1998 1999 REVENUES Equity in net earnings 4,593,860 5,594,156 Other Income 35,698 23,884 4,629,558 5,617,989 OPERATING AND OTHER EXPENSES 35,931 39,605 NET OPERATING INCOME 4,593,627 5,578,485 NET INTEREST INCOME (EXPENSE) 83,183 97,496 INCOME BEFORE EXTRAORDINARY GAIN 4,676,810 5,675,961 EXTRAORDINARY GAIN NET NET INCOME BEFORE INCOME TAX 4,676,810 5,675,861 PROVISION FOR INCOME TAX - - NET INCOME 4,676,810 5,675,961 RETAINED EARNINGS, BEG. OF YEAR 22,952,223 27,523,622 Prior period adjustment Cash dividends P.02 per share (105,411) (126,493) RETAINED EARNINGS, END OF YEAR 27,523,622 33,073,110 ========== ========== JG SUMMIT HOLDINGS, INC . PROJECTED BALANCE SHEETS (Parent Company) 1998 1999 CASH FLOWS FROM OPERATING ACTIVITIES Net income 4,676,810 5,675,981 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity in net earnings of affiliated companies (4,593,860) (5,594,156) Dividends received from equity investments 97,460 107,206 Depreciation 12,105 12,105 Changes in operating assets and liabilities Decrease (increase) in: Marketable equity securities Receivables (23,999) (26,399) Other current assets - - Other assets (542,061) 499,111 Increase (decrease) in Accounts payable & accrued expenses 44,440 48,884 (329,105) 722,733 CASH FLOWS FROM INVESTING ACTIVITIES Net increase in equity investments 0 0 Payment of subscriptions payable Increase in deferred credits 0 0 CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in due to affiliated companies 6,800,000 (1,836,010) Decrease (increase) in due from affiliated companies (2,050,000) 25 Cash dividends paid (105,411) (126,493) Increase (decrease) in loans (6,800,000) (368,208) Proceeds from: Stock rights offering 2,562,500 1,537,500 Purchase of treasury shares 407,089 (793,186) NET INCREASE (DECREASE) IN CASH AND TEMPORARY CASH INVESTMENTS 77,984 (70,453) CASH AND TEMPORARY CASH INVESTMENTS AT BEGINNING OF YEAR 37,620 115,604 CASH AND TEMPORARY CASH INVESTMENTS AT END OF YEAR 115,604 45,151 Footnotes 1. The total shares applied for listing covering the 1.2 stock rights offering is not yet final. The Company has set the cut-off period for sale or trading of its treasury shares from April 16, 1998 to May 6, 1998. The Company, as holder of treasury shares, will not be entitled to avail of the rights offering.