Connected transaction: Proposed merger between NLEX Corporation and Tollways Management Corporation

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

(Incorporated with limited liability under the laws of Bermuda)

Website: http://www.firstpacific.com

The Company is pleased to announce that on 17 April 2017, NLEX and TMC, indirect subsidiaries of the Group, entered into a plan of merger and articles of merger, pursuant to which it is proposed that TMC will merge with and into NLEX, with NLEX as the surviving corporation.

NLEX is the concessionaire for both the North Luzon Expressway and the Subic-Clark-Tarlac Expressway projects.

TMC is engaged in the operation and maintenance of the North Luzon Expressway and the Subic-Clark-Tarlac Expressway.

The Merger shall take effect 15 days from and after the approval by the Philippine Securities and Exchange Commission of the articles of merger and the issuance of the certificate of filing of the articles of merger.

It is currently anticipated that the Merger will be completed in or around the third quarter of 2017.

Upon the Merger Effective Date, the TMC Shareholders participating in the Merger shall transfer all of their respective TMC Common Shares to NLEX in exchange for

2.7 NLEX Common Shares for every 1 TMC Common Share (or such other exchange ratio as may be approved by the Philippine Securities and Exchange Commission).

Upon the Merger Effective Date, NLEX shall be deemed to have acquired all the assets and assumed all the liabilities of TMC.

It is expected that the Merger will be beneficial to NLEX, and beneficial to the Group as a whole, for the following reasons:

• the integration of the administrative facilities of TMC and NLEX will result in improved economies of scale and efficiency of operations;

• the consolidation of the assets of TMC and NLEX will allow NLEX to procure financing and credit facilities under more favourable terms; and

• the Merger will make possible the more productive use of the properties currently owned by TMC and NLEX.

The Group has an approximately 55.0% voting interest and an approximately 42.0% economic interest in MPIC, which in turn owns MPTC as to approximately 99.9%. MPTC wholly owns MPTDC, which in turn has an aggregate effective interest in approximately 75.6% of the total number of NLEX Common Shares in issue and beneficially owns approximately 67% of the issued share capital of TMC.

Accordingly, TMC and NLEX are indirect subsidiaries of the Group.

Egis Investment owns 10% of NLEX and is, therefore, a substantial shareholder of NLEX and a connected person of the Company under the Listing Rules. Egis Investment is owned as to approximately 54% by Egis, which is, therefore, also a connected person of the Company under the Listing Rules.

The Merger includes the acquisition by NLEX of TMC Common Shares from Egis or Egis Investment. The Merger is, therefore, a connected transaction for the Company under the Listing Rules.

The Merger is a transaction with a person connected only at the subsidiary level and is on normal commercial terms. The directors (including the independent non-executive directors) of the Company consider that the Merger and the transactions contemplated thereunder, although not in the ordinary and usual course of business of the Group, are on normal commercial terms, and that the terms of the Merger are fair and reasonable and in the interests of the Company and its shareholders as a whole. The directors (including the independent non-executive directors) of the Company have approved the Merger and the transactions contemplated thereunder.

The highest applicable percentage ratio in respect of the connected transaction under the Merger, when aggregated with the acquisitions of an aggregate of 21% of the TMC Common Shares by MPTDC from Egis announced by the Company on 28 March 2017, is 1% or more but all the applicable percentage ratios are less than 5%. Therefore, the Merger, when aggregated with such previously announced acquisitions, is subject to the reporting and announcement requirements under Chapter 14A of the Listing Rules, but is exempt from the independent shareholders' approval requirement.

On 17 April 2017, NLEX and TMC, indirect subsidiaries of the Group, entered into a plan of merger and articles of merger, pursuant to which it is proposed that TMC will merge with and into NLEX, with NLEX as the surviving corporation.

The salient terms and features of the Merger are as follows:

17 April 2017

(ii)

NLEX TMC

surviving corporation

participating in the Merger shall transfer all of their respective TMC Common Shares to NLEX in exchange for 2.7 NLEX Common Shares for every 1 TMC Common Share transferred (or such other exchange ratio prescribed by the Philippine Securities and Exchange Commission).

Alternatively, a TMC Shareholder which has exercised its appraisal right under Title X (Appraisal Right) of the Corporation Code of the Philippines, and is therefore not participating in the Merger, will instead sell its TMC Common Shares to TMC for a cash consideration.

and Exchange Commission of the articles of merger and the issuance of the certificate of filing of the articles of merger.

It is currently anticipated that the Merger will be completed in or around the third quarter of 2017.

Commission.

to have acquired all the assets and assumed all the liabilities of TMC.

NLEX shall be the surviving corporation and its corporate existence shall continue.

It is expected that, upon the Merger becoming effective, the Group will have an aggregate effective beneficial interest in NLEX, as the surviving corporation following the Merger, of approximately 76%.

A business review and financial analysis of NLEX and TMC determined that the aggregate monetary consideration for all the TMC Common Shares should amount to approximately Php6.3 billion (equivalent to approximately US$125.5 million or HK$978.9 million) (the "Merger Consideration"). The exchange ratio of 2.7 NLEX Common Shares for every 1 TMC Common Share was determined with reference to the Merger Consideration. The NLEX Common Shares to be allotted and issued by NLEX under the Merger will not be subject to any restriction on subsequent sale.

Under the Merger, Egis (or, if a proposal by Egis to transfer its TMC Common Shares to Egis Investment is completed prior to the Merger Effective Date, Egis Investment) will transfer 49,400 TMC Common Shares to NLEX in exchange for 133,380 NLEX Common Shares. Based on the Merger Consideration, the monetary value of the NLEX Common Shares to be allotted and issued to Egis (or Egis Investment, as the case may be) will amount to approximately Php821 million (equivalent to approximately US$16.4 million or HK$127.6 million).