Manila Electric Company

October 22, 1982 Manila Electric Company c/o Atty. Marcelo N. Fernando Ortigas Avenue, Pasig Metro Manila Gentlemen: This has reference to your letter of October 18, 1982 requesting official confirmation that your company's issuance from time to time of preferred shares out of the authorized capital stock of P400 million constitutes exempt transactions in contemplation of the Revised Securities Act. Section 6(a) of Batas Pambansa Blg. 178 otherwise known as the Revised Securities Act, includes among exempt transactions the following: "(11) Any issuance of any security by a public utility or service corporation which, in compliance with or pursuant to law, regulation or decree, is intended to broaden its equity base as well as to finance a part of the capital investment thereof through the issuance and sale of stocks." (Emphasis supplied) Considering the finding of the Board of Energy in its decision in BOE Case No. 42-452 that "the funds to be generated by the issuance of preferred shares are intended to broaden the equity base of Meralco as well as to finance the capital investment thereof" as stated in your said letter, we confirm the view that said transactions are exempt transactions under the above-cited provision of the Revised Securities Act. cdll Very truly yours, (SGD.) JULIO A. SULIT, JR. Associate Commissioner