First Pacific Company Limited

Press Release

3rd December 1997

FIRST PACIFIC AGREES TO SALE OF PACIFIC LINK FOR HK$4.835 BLN

First Pacific Company Limited announced today that it has signed a memorandum of understanding with Hongkong Telecom CSL, which has agreed to buy 100 per cent of Pacific Link Communications Limited for HK$4,835 million.

The transaction has received approval from Hong Kong's Office of the Telecommunications Authority.

After the retirement of Pacific Link's debt, First Pacific, which owns 65 per cent of Pacific Link, will receive approximately HK$2,400 million, as well as a further HK$360 million from the repayment of a facility extended to Pacific Link. Vodafone Group, which owns the remaining 35 per cent of Pacific Link, will receive its ratable proceeds from the sale.

First Pacific's Managing Director Mr. Manuel Pangilinan said: "First Pacific has taken the view that it will focus its telecommunications efforts on markets where it can be the dominant player or a solid second operator. It would clearly be difficult for us to achieve that status in Hong Kong, where the local mobile communications market is extremely competitive and consolidation is necessary. In this light, we believe the interests of our shareholders, staff and customers are best served by consolidating our operations here with those of Hongkong Telecom."

Linus Cheung, Chief Executive of Hongkong Telecom, said: "The two companies will work closely to ensure full and effective integration of our operations. Particular attention will be given to ensuring a smooth transition in customer service, and the speedy introduction of new choices in products and services."

Mr. Pangilinan continued: "First Pacific remains very much committed to the telecommunications industry, which will remain a core business of the Group. We intend to use part of the proceeds from this sale to help fund the development of our telecommunications businesses in regional markets which offer us higher growth potential and our desired market position."

Henry Goldstein, Executive Director of Asia Link Holdings Limited, the holding company for First Pacific's telecommunications activities, said: "Among the markets in which we intend to concentrate our telecoms investments are the Philippines and India.

"In the Philippines, Smart is well on its way to becoming the country's premier integrated telecoms company, providing mobile, fixed-line and international services. In India, Escotel has become the market leader in each of the three areas in which it operates. These areas are Haryana and Uttar Pradesh (West) surrounding New Delhi, and the southwestern state of Kerala. We see excellent prospects for these markets, as well as for our other activities around the region," he said.

Following the Pacific Link sale, First Pacific still has more than 700,000 cellular subscribers located within the following markets around the Asia-Pacific region:

• In the Philippines, Smart Communications, Inc., which is 52 per cent owned, with 586,000 subscribers.
• In southern Guangdong province, Shenzhen Merchant Link, in which First Pacific has a 60 per cent interest, with 32,000 subscribers.
• In Fujian province, Fujian Telecom, in which First Pacific has a 26 per cent interest, with 21,000 subscribers.
• In Indonesia, PT Metro Selular Nusantara (Metrosel), which is 35 per cent owned and provides mobile cellular services in Central and Eastern Java, with 40,000 subscribers.
• In India, Escotel Mobile Communications Limited, which is 49 per cent owned, with 35,000 subscribers.
• In Taiwan, Tuntex Telecommunications is 18 per cent owned and will launch services later this year.

First Pacific is a Hong Kong based, Asian-oriented conglomerate with activities in four core businesses: Marketing & Distribution, Telecommunications, Property and Banking.

For further information, please contact:

Henry Glodstein Executive Director Asia Link Holdings Limited	Tel: (852) 2842 4331
Robert Sherbin Group Vice President Corporate Communications First Pacific Company Limited	Tel: (852) 2842 4380

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