First Pacific Company Limited

Press Release

FIRST PACIFIC UNIT ANNOUNCES RESTRUCTURING BEFORE SMART IPO

First Pacific Company Limited's Philippine flagship, Metro Pacific Corporation, today announced that it has agreed to an internal reorganization of the shareholder structure of Smart Communications Inc., its Manila-based integrated telecommunications affiliate, ahead of Smart's Initial Public Offering (IPO), which is planned for later this year.

The restructuring, which is subject to Philippine regulatory approval, will involve Metro raising its 28 per cent holding in Smart by obtaining Smart shares from a First Pacific affiliate in the Philippines in exchange for newly issued Metro shares. Subsequent to the reorganization, Metro will have a majority economic interest in Smart, while First Pacific's holding in Metro will be determined based on the share prices of Smart and Metro at the time of the IPO.

The effect of the Smart share reorganization is to enable other foreign investors to participate more readily in the IPO. It will also raise Metro Pacific's exposure to the telecommunications sector, providing it with a better balance in terms of recurring income, cash flow and growth prospects, complementing its highly successful investments in the Philippine property sector.

Mr Napoleon Nazareno, President of Metro Pacific and a Director of Smart, said: "The agreement to increase Metro Pacific's investment in Smart represents a significant development in its stated policy of strategic diversification. This step provides Metro with better exposure to the prodigious growth of the Philippine telecommunications sector."

Smart is a leading telecommunications company in the Philippines, with licenses for cellular, fixed-line and paging operations. Its cellular service is the country's largest with 450,000 subscribers. It is also building out its fixed line network which will have a capacity of 700,000 lines by year-end. Smart is 15 per cent held by Nippon Telephone & Telegraph Corp. of Japan, which will remain unchanged after the restructuring.

Metro Pacific is a leading conglomerate with activities of marketing & distribution and packaging, as well as interests in the Philippines in the areas of property - through the Fort Bonifacio project in Manila and Landco Inc. - and banking, through PDCP Bank.

First Pacific is a Hong Kong based, Asian-oriented conglomerate with operations in the areas of Marketing & Distribution, Telecommunications, Property and Banking. It has more than 52,000 employees in 50 countries and turnover in excess of US$7 billion, at year-end 1996.

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