SET Announcements

SET requires CK to clarify investment in Water Flow Co.,Ltd. Pursuant to CH. Karnchang Public Company Limited ( CK ) reported that its Executive Board had resolved Thai Tap Water Supply Co,Ltd ( TTW : CK's subsidiary) to purchase 99,994 ordinary shares or 99.994 percent of the registered capital in Water Flow Co.,Ltd ( Water Flow ) ( Baht 10 million at Par value of Baht 100 per share ) from Advance Assets Associates Limited (Advance Assets) within Feburary 06,at the price of not exceeding Baht 7,000 per share , for the total amount of not exceeding 699,958,000 Baht, The source of investing fund is the proceed from capital increase of TTW.CK also informed that Advance Assets is a foreign legal entity incorporated in England ,are not connected persons of CK and the transaction does not fall under the criteria under the SET Notification deemed as a connected transaction. (Details as SET Smart on 12 January 05 ) It was found upon examination of Water Flow 's shareholders' registration book from Minister of Commerce as of Nov 22,2005 ,the name of Water Flow does not appear in such book. However,Water Flow has been established since 5 Mar 2001 and had the following names as its shareholder. April 30,02 August 2,05 August 30- November 22,05 CH. Karnchang Holding 49.99% 49.99% Thames Water International (Thailand) 49.99% Others 0.02% 0.02% 0.02% CK. Office Tower 49.99% 49.99% Mahasiri Siam 49.99% CK. Office Tower and Mahasiri Siam are CK's major shareholders.If TTW, CK's subsidiary, purchases Water Flow's ordinary shares from CK's major shareholders.there must be an approval by its unrelating shareholders before entering the transaction. Hence, the SET requests CK to clarify the following information 1.Why CK reported that TTW is going to purchase Water Flow 's ordinary shares from Advance Assets,as the name of Advance Assets does not appear in the registration book. 2.Why TTW does not buy Water Flow 's ordinary shares directly from Mahasiri Siam and CK. Office Tower Remark : as of 22 Nov 05 ,Mahasiri Siam and CK office Tower are shareholders of Water Flow;while CK's Executive Board approved the transaction on 10 Jan 06. The period is less than 2 months. 3.The consideration process of CK and TTW,CK's subsidiary , for TTW to purchase Water Flow 's ordinary shares from Advance Assets from the begining until the management's conclusion, the date that CK and TTW Executive Board and/or Board of directors had the resolution and the date when the management set the meeting. Remark : on 21 Dec 05 CK's board of directors approved to purchase TTW's ordinary shares for Bht 653.732 milllion (2,254,250 shares @ 290 baht each)and CK did not state the objective of TTW's capital increase. 4.According to CK's information that Advance Assets are not connected persons ,hence the SET requests the information of Advance Assets such as the date of establishment, the ultimate shareholders, the namelist of its directors, and business characteristics on the date before the resolution of investing in Water Flow. 5.According to CK's information that the purchase price of such shares is lower than CK's estimated price, which used the method of assessment of the value of business of Water Flow based on the net present value of the cashflow (Discount Cashflow), taking into account the projected cashflow of Water Flow , which should be derived in each year in the future, while book value per share is 653.22 Baht. So CK is required to clarify important assumption in valuation and the name of the independent valuer,if any. 6.As CK reported that the transaction will be done within Feburary 06 and payment in cash will be made on the date of transfer of ownership , so CK is requested to specify the date of such payment and ownership transfer. 7. Such transaction was reported to the SET that it was approved by CK Executive Board. So, CK is requested to clarity if such transaction has to be approved by its board of directors or not, if it has to be, CK is requested to inform its board of directors' opinion on the appropriateness of the transaction. The SET requests CK disseminate the above information by Wednesday 25 Jan 06.