Menzi Development Corporation

December 20, 1982 Menzi Development Corporation 20th Floor, Pacific Bank Bldg. 6776 Ayala Avenue Makati, Metro Manila Gentlemen: This has reference to your letter dated December 14, 1982, regarding the query posed therein. It appears therein that your pulp and paper mill at Talakag, Bukidnon has been tapped by the government to manufacture the currency paper, sensitized check paper and other security/safety papers required by the Central Bank of the Philippines, in collaboration with the National Development Company, the Development Bank of the Philippines and the Central Bank. It appears further that the Supply Contract for the machinery and equipment to upgrade said pulp and paper mill so as to permit the manufacture of said special types of paper had been signed with Messrs. Giesecke & Devrient GmbH (G & D) of West Germany. Likewise, it appears that in acknowledgment of the tender of the US $2 million (P18 million) equity investment of Papierfabrik Louisenthal Gmbh (PL),the corporation is to issue immediately the corresponding certificate of ordinary common shares but which you can not do inasmuch as the corporation has available and unissued from the existing authorized capital stock of P210 million, only P8 million worth of ordinary common shares and P22 million worth of redeemable common shares. To be able to fully cover the proposed subscription of approximately P18 million common shares, you have to amend your articles of incorporation which likewise you cannot do presently since you are pressed for time, and any delay could cause possible cancellation of the project, you then propose to issue immediately P8 million worth of ordinary common-shares and provisionally P10 million worth of redeemable common shares at the existing par value of P1.00 per share from the unissued capital stock and that, as soon as this Commission approves the amended articles of incorporation, you will ask PL for the return of said P10 million worth of redeemable common shares for the same amount of ordinary common shares. The said P10 million worth of redeemable common shares to be returned will be part of the P16 million worth of redeemable common shares to be reclassified in the articles. In connection therewith, please be informed that this Commission interposes no objection to the aforementioned proposal, provided that Section 16 of the Corporation Code of the Philippines is complied with in further amending your amended articles of incorporation converting P16 million worth of redeemable common shares into ordinary common shares. Provided, further, that should the entry of said foreign investment exceed that percentage of outstanding capital allowed by the Board of Investments in accordance with the Omnibus Investments Code, then, the consent of said office should first be secured. cdll Please be advised accordingly. Very truly yours, (SGD.) JULIO A. SULIT, JR. Associate Commissioner