PSE Circular for Brokers No. 874-98

April 30, 1998 PSE CIRCULAR FOR BROKERS NO. 874-98 H-8001 FOR Ms. Maria Isabel Garcia FIRM Philippine Stock Exchange, Inc. CITY Pasig City TELEPHONE (02) 636-0122 FAX: (02) 636-0809 FROM Mr. Jesus A. Santiago FIRM Aboitiz Equity Ventures, Inc. CITY Cebu City, Philippines TELEPHONE (032) 2310-705/2312-580 FAX (032) 2312-556 TOTAL NO. OF PAGES INCLUDING THIS ONE: 2 The information contained in this facsimile is intended for the named recipients only. If may contain privileged and confidential information and if you are not an intended recipient, you must not copy, distribute or take any action in reliance on it. If you have received this facsimile in error, please notify us immediately by a collect telephone call to any of the above telephone numbers and return the original to the sender by mail. In a deliberate effort to pursue the company's corporate strategy of concentrating on its core businesses which are Power and Financial Services. AEV has sold all its shares in Pilipinas Kao, Inc., an oleo-chemical plant located in Jasa-an. Misamis Oriental, to its partner, Kao Corporation of Japan. Cdphil The shares, representing a 30% stake in the company, were valued at P350 Million and generated a profit of approximately 93 Million for AEV. This divestment will allow AEV to pour in additional capital, without resorting to loans, into its various power projects throughout the country. It comes at an appropriate time as AEV is currently negotiating power purchase agreements for three Build-Operate-Transfer hydroelectric projects for National Power Corporation that AEV had successfully bid for last year. This move, following the earlier sale of its cement interests, is an additional manifestation of AEV's commitment to a focused strategy. The divestment made sense as the selling price was favorable to both parties. For AEV the immediate impact is that cash will increase by about 336 million after taxes and costs. Equity earnings will reduce by between 21-30 million pesos annually, representing the foregone earnings share from Pilipinas Kao. On the other hand, interest income will increase by 40-50 million annually. When the funds are deployed to new investments in our core businesses, at returns higher than interest earnings, the contribution should increase even more. The balance sheet impact, rounded for brevity, is an increase in cash of 336 million, a decrease in investments of 243 million, and an increase in stockholders equity of 93 million. LLpr Thank you. ABOITIZ EQUITY VENTURES By: (SGD.) JESUS A. SANTIAGO Corporate Secretary REPUBLIC OF THE PHILIPPINES ) CITY OF CEBU ) S.S. SECRETARY'S CERTIFICATE I, SYLVA G . AGUIRRE-PADERANGA , after having been duly sworn according to low, hereby deposes and states: 1. That I am a Filipino citizen of legal age, married, and a resident of Cebu City, Philippines; 2. That I am the Assistant Corporate Secretary of ABOITIZ EQUITY VENTURES, INC ., a corporation duly organized and existing under and by virtue of the laws of the Philippines; 3. That at a special meeting of the Board of Directors held on April 29, 1998 , the following resolutions were unanimously passed on approved: "WHEREAS, it is Aboitiz Equity Venture's (AEV) strategic direction to focus on its core businesses of electricity and banking and to divest of its non-core holdings at opportune time; "WHEREAS, the immediate sale of AEV's stake in the Pilipinas Kao is consistent with the above-stated strategic direction of the Corporation; "NOW THEREFORE, be it: "RESOLVED, that the Board of Directors of Aboitiz Equity Ventures, Inc. (the "Corporation") authorize, as it hereby authorizes, the Corporation to sell, assign or transfer its One Hundred Thirty Million One Hundred Forty Thousand (130,140,000) shares of Pilipinas Kao for a consideration of Pesos: Three Hundred Fifty Million (P350,000,000.00); "RESOLVED FURTHER, that any one of the following officers, to wit: 1. Mr. Jon Ramon Aboitiz 2. Mr. Erramon I. Aboitiz 3. Mr. Manuel M. Moraza be authorized, as he is hereby authorized, to sign, execute, endorse and deliver the Shares Purchase Agreement, Shares of Stock and such other documents and instruments as may be required, necessarily, desirable or incidental to the foregoing transactions." 4. That these board resolutions have not been revoked, amended or modified and remain valid and binding on the Corporation. 5. That the foregoing is in accordance wit the records of the Corporation. FURTHER, Affiant Sayeth Naught (SGD.) SYLVA G. AGUIRRE-PADERANGA Assistant Corporate Secretary SUBSCRIBED AND SWORN to before me this April 29, 1998 at Cebu City, Philippines. Affiant exhibited to me his Comm. Tax Cert. No. 3149715 issued at Cebu City on February 28, 1997. Doc. No. 118; Page No. 25; Book No. 4; Series of 1998.