NEWSFLASH

MIMOSA RESORT GETS P650-M BAILOUT

Clark Field, Pampanga, July 19, 2000 - An investment company has agreed to arrange for a P650- million loan to beleaguered Mondragon International Philippines Inc. (MIP), which could pave the way for the company's return as manager and operator of the Mimosa Leisure Estate in Clark Field,

MIP announced yesterday that it has signed a memorandum of agreement with PentaCapital Investment Corp. and the MIP subsidiary, Mondragon Leisure and Resorts Corp. (MLRC).

Under the agreement, MIP said MLRC would enter into a new management agreement with PentaCapital whose nominee would take over the management of MLRC in preparation for the possible entry of new investors.

According to MIP, PentaCapital has agreed to arrange a fully-secured, last in/first-out (LIFO) loan of up to P650 million to be used by MLRC to pay the compromise back rentals and levies with the Clark Development Corp. and the Philippine Gaming and Amusement Corp. (Pagcor).

A LIFO loan assures PentaCapital that its loan would be the first to be settled should MLRC run into fresh financial problems and in the event of a foreclosure.

Part of the amount will be used to settle unpaid obligations to the Bureau of Internal Revenues and working capital to put MLRC back in operation.

MIP said PentaCapital also agreed to negotiate with CDC, Pagcor, the BIR and various creditors on behalf of MLRC for softer terms of its existing agreements.

CDC had earlier shut its doors on MLRC and said it preferred to open the Mimosa Leisure Estate to another partner who would invest or manage the operations of the 250-hectare resort complex.

CDC, the government unit overseeing the operations of the Clark Special Economic Zone in Pampanga, seized control of the Mimosa Leisure Estate in December 1999.

The STAR reported earlier that Sultan Haji Hassanal Bolkiah of Brunei was set to take over the leisure estate and infuse P2 billion in fresh capital into the cash-strapped company. Mondragon president Jose Antonio Gonzalez was reported to be "90 percent sure" that the monarch would infuse money into the venture.

Aside from Bolkiah, businessman Antonio (Tony Boy) Cojuangco had also expressed interest in the facility.