78JZ Sg Issuer 25

RNS Number:7579P
First Pacific Capital (1997) Ld
10 January 2002


The Stock Exchange of Hong Kong Limited takes no responsibility for the
contents of this announcement, makes no representation as to its accuracy or
completeness and expressly disclaims any liability whatsoever for any loss
howsoever arising from or in reliance upon the whole or any part of the
contents of this announcement.

                        FIRST PACIFIC COMPANY LIMITED

               (Incorporated in Bermuda with limited liability)


                                 ANNOUNCEMENT

                     SHORT TERM LOAN FACILITY ADVANCED BY

                        FIRST PACIFIC COMPANY LIMITED

                         TO METRO PACIFIC CORPORATION

                                     AND

                TENDER OFFER FOR OUTSTANDING CONVERTIBLE BONDS

SHORT TERM LOAN FACILITY

First Pacific announces that its wholly-owned subsidiary, Larouge, has been
advised by MPC that it is unable to repay the Loan which was due and payable on
31st December, 2001. Larouge is a secured creditor in respect of a 50.4 per
cent equity interest in BLC owned by MPC.


This follows First Pacific's extension of the original 31st October, 2001
repayment date, which was announced on 1st November, 2001, in light of MPC's
decision to offer for sale its entire 69.6 per cent controlling equity interest
in BLC.


In light of the foregoing, First Pacific will now, as a secured creditor,
co-manage with MPC the on-going sale of MPC's 69.6 per cent controlling stake
in BLC. When agreement is reached for such a sale, First Pacific would offer
the 50.4 per cent interest in BLC, which it holds as a secured creditor, as
part of the sale transaction.


Meanwhile, MPC is in the process of finalising a plan to reduce MPC's overall
existing financial obligations, which plan will be announced no later than the
end of February 2002.


TENDER OFFER FOR OUTSTANDING CONVERTIBLE BONDS

First Pacific also announces that its wholly-owned subsidiary, First Pacific
Capital (1997) Limited, will, subject to the approval of the trustee appointed
in relation to the Bonds, make a tender offer for all of the Bonds currently
outstanding in the principal amount of US$208 million (HK$1.6 billion), at a
total cost, including interest and redemption premium, of approximately US$281
million (HK$2.2 billion), which will be funded by US$90 million (HK$702
million) of cash on hand and by drawing down sufficient funds from its HK$1.56
billion (US$200 million) facility announced on 5th November, 2001. Further
details of the tender offer will be announced as soon as they are discussed and
finalized with the trustee.


SHORT TERM FACILITY

Background

Reference is made to First Pacific's announcement of 26th March, 2001, and
shareholder circular of 28th March, 2001, in relation to the entering into of
a conditional Facility Agreement with MPC; the announcement of 3rd October,
2001, in relation to MPC undertaking to review strategic alternatives for its
69.6 per cent controlling interest in BLC; and the announcement of 1st
November, 2001, in relation to extending the maturity date for the repayment
of the Loan.


As set out in First Pacific's shareholder circular dated 28th March, 2001,
Larouge advanced the Loan to MPC upon and subject to the terms and conditions
of the Facility Agreement, details of which are summarized in the same
shareholder circular. The Loan was secured by a pledge over shares that MPC
and/or its affiliates own in BLC representing approximately 50.4 per cent of
the issued share capital of BLC. BLC is a 55.0 per cent shareholder in a joint
venture project with the Philippine Government that commenced, in 1995, the
re-development of a 155-hectare portion of a new Metro Manila central business
district (namely the "Bonifacio Global City"), that previously was a
Philippine military base.


Under the Facility Agreement, the Loan was repayable on demand by Larouge at
any time. If no demand was made prior to 31st October, 2001, the outstanding
principal amount of the Loan, together with all interest accrued thereon and
other moneys due, was repayable on that date; provided however that Larouge
was permitted, in its absolute discretion, to extend the final date for
repayment to a date no later than 31st December, 2001.


On 1st November, 2001, First Pacific announced that Larouge had agreed, in its
discretion, to extend to 31st December, 2001, the final maturity date for
repayment of the Loan, in light of MPC's decision to offer for sale its entire
69.6 per cent interest in BLC. At that time, it was decided by MPC to seek to
repay the loan with some of the proceeds from the sale of its controlling
interest in BLC rather than from sales of individual parcels of land at Fort
Bonifacio. Subsequent to this extension of time, First Pacific assigned two
senior executives to Manila to focus upon MPC's ongoing initiatives to address
all of its financial obligations.


Rationale for continuing the sale of BLC

Due principally to continued depressed real estate values in the Philippines,
MPC has not yet been able to conclude a sale of its interest in BLC. As a
result, MPC has now advised that it is unable to repay the Loan of US$90
million (HK$702.0 million) and accrued outstanding interest of US$8.2 million
(HK$64.0 million). However, MPC remains in discussions with potential
purchasers for such interest.


In light of the foregoing, First Pacific will now, as a senior secured
creditor, co-manage with MPC the on-going sale of MPC's 69.6 per cent
controlling stake in BLC. When agreement is reached for such a sale, First
Pacific, as a senior secured creditor, would offer the 50.4 per cent interest
in BLC as part of the sale transaction, which should be sufficient to recover
the Loan and accrued outstanding interest.


Impact on First Pacific

MPC's inability to repay Larouge will require the Company to increase the
amount of the draw down, under its two-year HK$1.56 billion (US$200 million)
facility announced on 5th November, 2001, in order to repay the Bonds by 27th
March, 2002. If the Company does not ultimately recover the Loan, First
Pacific would need to raise additional funds through a disposal of assets or
the issue of a financial instrument.


MPC plan to reduce financial obligations

Meanwhile, MPC is in the process of finalising a plan to reduce MPC's overall
existing financial obligations, which plan will be announced by no later than
the end of February 2002. There follows an analysis of MPC's current financial
position.



Nine months ended 30th September, 2001              Pesos        US$        HK$
(unaudited)                                      millions   millions   millions
                                                            
Cash                                                  898       17.4      135.5
Debt                                               18,323      354.4    2,764.4
Net indebtedness                                   17,425      337.0    2,628.9
Net asset value*                                   32,666      631.8    4,928.3

Revenues                                            5,487      106.1      827.8
(Loss) for the period                             (2,208)     (42.7)    (333.1)


* In view of the depressed real estate values in the Philippines, realizable
values may be less than unaudited net asset value as at 30th September, 2001


TENDER OFFER FOR OUTSTANDING CONVERTIBLE BONDS

In light of MPC's inability to repay Larouge, the Board wishes to allay any
concerns that might exist with respect to First Pacific's ability to fully
repay the Bonds on maturity. Therefore, as the Company has the necessary
resources to effect full repayment, and given the short time frame to
maturity, the Board considers it would be in the best interests of both
shareholders and bondholders to accelerate the repayment of the outstanding
Bonds.


Accordingly, First Pacific announces that its wholly-owned subsidiary, First
Pacific Capital (1997) Limited, will, subject to the approval of the trustee
appointed in relation to the Bonds, make a tender offer for all of the Bonds
currently outstanding in the principal amount of US$208 million (HK$1.6
billion), at a total cost, including interest and redemption premium, of
approximately US$281 million (HK$2.2 billion). The repayment will be funded by
US$90 million (HK$702 million) of cash on hand and by drawing down sufficient
funds from its HK$1.56 billion (US$200 million) facility which was announced
on 5th November, 2001. MPC's inability to repay Larouge does not prevent
drawdown under this facility.


In the event that the trustee of the Bonds withholds approval for such a
tender offer, the bondholders may either declare the Bonds immediately due and
payable (in accordance with the Bonds' certification procedures), or be repaid
on the original maturity date of 27th March, 2002.


Further details of the tender offer will be announced as soon as they are
discussed and finalized with the trustee.


First Pacific will make further announcements on these matters as and when
appropriate.


DEFINITIONS

In this Announcement, unless the context otherwise requires, the following
expressions have the following meanings: -

"BLC"       Bonifacio Land Corporation, a corporation established under the
            laws of the Republic of the Philippines and in which MPC has an
            attributable economic interest of approximately 69.6 per cent;
"Board"     the board of directors of First Pacific;
"Bonds"     2 per cent guaranteed convertible bonds, in the amount of US$350
            million (HK$2.7 billion), issued by First Pacific Capital (1997)
            Limited, a wholly-owned subsidiary of First Pacific, and guaranteed
            by First Pacific. The Bonds are redeemable at a price of 134 per
            cent of face value;
"Facility   the Facility Agreement dated 26th March, 2001, entered into by
Agreement"  Larouge and MPC in relation to the Loan as amended;
"First      First Pacific Company Limited;
Pacific" or
"the
Company"
"Larouge"   Larouge B.V., a company incorporated under the laws of the
            Netherlands and a wholly-owned subsidiary of First Pacific;
"Loan"      the short term loan facility in an aggregate principal amount of
            US$90.0 million (HK$702.0 million) advanced to MPC by Larouge under
            the Facility Agreement, which is secured by a 50.4 per cent
            interest in BLC held by MPC; and
"MPC"       Metro Pacific Corporation, a corporation established under the laws
            of the Republic of the Philippines and the shares of which are
            listed on the Philippine Stock Exchange, and in which the First
            Pacific Group has an aggregate direct and indirect attributable
            economic interest of approximately 80.6 per cent.


For illustration purposes, translations of amounts have been made on an
approximate basis at the rates of US$1 = HK$7.8 = Pesos 51.7. Percentages, and
figures expressed in billions and millions, have been rounded.


                                          By Order of the Board

                                      FIRST PACIFIC COMPANY LIMITED

                                             Ronald A. Brown

                                 Executive Director and Company Secretary

Hong Kong, 9th January, 2002


Please also refer to the published version of this announcement in the South
China Morning Post (English) and Hong Kong Economic Times (Chinese).

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