09:09     FIRST PACIFIC<00142> - Announcement & Resumption (7)                

    of voting interest of PLDT from 31.3 per cent. to 27.3                    
    per cent.                                                                 
                                                                              
    Subject to any further changes in the Guarantor's                         
    direct or indirect economic interest in PLDT, in the                      
    event that all of the Notes are exchanged, PLDT will                      
    continue to be accounted for as an associated company                     
    of the Guarantor (excluding any other events relating                     
    to the PLDT Shares).                                                      
                                                                              
    PLDT is a telecommunications provider in the                              
    Philippines. PLDT offers a wide range of                                  
    telecommunications services across the Philippine's                       
    most extensive fibre optic backbone, cellular, fixed                      
    line, internet and satellite networks. The Guarantor                      
    recorded a profit contribution of US$76.7 million                         
    from PLDT for the year ended 31 December 2003, and                        
    recorded a profit contribution of US$48.8 million for                     
    the year ended 31 December 2002.                                          
                                                                              
    As at 30 June 2004, the Guarantor accounted for the                       
    share of net profit of PLDT and recorded its                              
    investment in PLDT in its consolidated accounts under                     
    the equity accounting method at a carrying value of                       
    US$682.6 million (or share of net asset value of                          
    US$163.7 million as included in associated companies                      
    of the consolidated balance sheet).                                       
                                                                              
    Pursuant to the new Hong Kong Accounting Standard                         
    (HKAS) 39 "Financial Instruments: Recognition and                         
    Measurement" which has became effective from 1                            
    January 2005 onwards, the exchangeable option of the                      
    Notes qualifies as an embedded derivative. Upon the                       
    initial recognition, the fair value of the                                
    exchangeable option is identified and accounted for                       
    separately from the fair value of the bond instrument.                    
    The initial fair value of the exchangeable option upon                    
    the issuance of the Notes is estimated to be                              
    approximately US$13.9 million. The fair value of the                      
    option liability will continue to be assessed on a                        
    mark-to-market basis at each balance sheet date                           
    reflecting primarily the changes in PLDT share price.                     
    Any change in fair value of the exchangeable option                       
    during the relevant accounting period will be                             
    recognized and charged to the profit and loss account.                    
                                                                              
    The balance (net of commission, professional and                          
    administrative expenses amounting to approximately                        
    US$5.0 million) of the Notes of approximately                             
    US$180.1 million will be accounted for as a long term                     
    financial liability in the Guarantor's consolidated                       
    balance sheet. The difference between the initial                         
    fair value of US$180.1 million and the aggregate                          
    redemption value of US$262.6 million will then be                         
    accreted, as interest expense, over the life of the                       
    Notes, or until the Notes are extinguished on                             
    conversion or early redemption, based on the                              
    effective interest rate method.                                           
                                                                              
    As an associated company, investment in and results                       
    of PLDT will continue to be equity accounted for by                       
    the Guarantor under HK GAAP.                                              
                                                                              
    USE OF PROCEEDS                                                           
    The estimated net proceeds of the issue of the Notes,                     
    after deduction of commissions and professional and                       
    administrative expenses (amounting to approximately                       
    US$5,000,000), are estimated to be approximately                          
    US$194,000,000. The Issuer intends to lend the net                        
    proceeds from the issue of the Notes to the Guarantor.                    
    The Guarantor intends to use the net proceeds for                         
    general corporate purposes including acquisitions in                      
    line with the Guarantor's