NEWSFLASH

GATCHALIAN GIVES UP FORT ILOCANDIA HOTEL IN LAOAG
(By Rocel C. Felix)

Laoag, Ilocos Norte, July 18, 2000 - Plastics king William Gatchalian's Waterfront Philippines Inc. (WPI) has given up its 54-percent controlling stake in the Fort Ilocandia Hotel in Laoag, Ilocos Norte due to poor business conditions.

In a disclosure to the Philippine Stock Exchange (PSE), WPI said the slump in the tourism industry, the lackluster stock market and the general weakness of the economy compounded by the hostilities in Mindanao, have forced the company to withdraw its investments in Fort Ilocandia, the only five-star hotel resort facility in Ilocos Norte which also operates a casino.

Arthur Ponsaran, WPI corporate secretary, said the board of directors decided during last week's meeting to cut their losses in Fort Ilocandia which has not generated the expected revenue.

"The board of directors recognized the non-viability in the short and medium term of its investment in the operations of Fort Ilocandia Hotel," Ponsaran said. As a result, WPI could not fund the urgent rehabilitation and renovation work to arrest the deterioration of the hotel facilities.

WPI also disclosed that it rescinded its 54-percent investment consisting of about four million shares of the common stock of Polar Peak Philippines Inc., owners and operators of Fort Ilocandia Hotel. WPI added it also cancelled the issuance of 391.8 million common shares of WPI in exchange for the investment of Polar Peak.

The Fort Ilocandia Hotel was bought by Gatchalian last year, along with the Davao Insular Hotel Co. Inc., and was bankrolled through the increase in WPI's capitalization from P2 billion to P5 billion.

The acquisition allowed WPI to integrate the operations of both hotels into its Cebu Waterfront Hotel operations.

This marks the second time that Gatchalian is divesting from his investments because of setbacks.

Gatchalian's Wellex Industries earlier gave up its 25-percent interest in Air Philippines Inc., which is 70-percent owned by tycoon Lucio Tan shortly after one of its planes crashed in Samal Island near Davao, killing all passengers.