SET Announcements

(Translation) No. CK-08-0000-AFD-L-0179 May 15, 2008 Re: Notification of Change of Debt Burden in the Joint Venture BBCD Attn.: President of the Stock Exchange of Thailand Reference is made to the fact that the Board of Directors Meeting No. 1/2008 of CH. Karnchang Public Company Limited, held on February 5, 2008, resolved to grant approval for the Company to enter into agreement with partners of the Joint Venture BBCD (in which CH. Karnchang Public Company Limited holds 35 percent) as to allocation of loss and debt burden of such Joint Venture. Bilfinger Berger AG, "BB", as creditor of the Joint Venture, was willing to waive its right of claim for the debt repayment of Euro 70 Million or approximately Baht 3,501 Million (at the exchange rate as at March 31, 2008) from the Joint Venture BBCD under the loan agreements as follows: - Euro 65 Million under the loan agreement dated June 27, 2002; and - Euro 4 Million as part of the loan agreement dated November 5, 1997. Such waiver of the right of claim for the debt repayment will come into effect when the Company has already accepted assignment of the debt burden and accrued interest owed to the domestic lending banks of the Joint Venture BBCD, and the Company will gradually extend the loan to the Joint Venture BBCD for the Joint Venture BBCD to repay the loan debt to BB in the total amount of approximately Euro 13.5 Million or approximately Baht 675 Million as per the loan repayment schedule, which shall be settled by the year 2010. The Company and the Joint Venture partners considered and deemed it appropriate to allocate the loss of the Joint Venture, after acknowledgement of the results of the filing of the lawsuit with the court to claim for increased costs from the Expressway Authority of Thailand, so that the Joint Venture would be able to allocate the actual loss to its partners. However, the Company and the Joint Venture partners agreed to allocate the debt burden of the Joint Venture BBCD in proportion to their respective shareholdings in the Joint Venture, which according to the financial statements as at March 31, 2008, totaling to approximately Baht 12,990 Million (the Company currently bears the debt burden of approximately Baht 898 Million only or representing 6.91 percent which is less than 35 percent to be borne by the Company under the joint venture agreement). The Company received the allocated burden to pay the debt and accrued interest to the domestic lending banks and the creditor of the Joint Venture in proportion to its shareholding in the Joint Venture as follows: Transaction Amount TMB Bank Public Company Limited Loan Baht 683 Million Bangkok Bank Public Company Limited Loan Baht 688 Million KASIKORNBANK Public Company Limited Loan Baht 614 Million Accrued Interest Baht 405 Million Payment of Euro 13.50 Million to the Joint Venture Baht 675* Million Other Debts Baht 114 Million Total Baht 3,179 Million * At the exchange rate as at March 31, 2008, i.e., Euro 1 equaled Baht 50.0139 (Source: The Bank of Thailand) In this regard, the aforesaid allocation of the debt burden of the Joint Venture BBCD represented only 31.38 percent which is lower than 35.00 percent to be borne by the Company in the Joint Venture BBCD by 3.62 percent or the Company received the allocation less than the debt burden of the Joint Venture BBCD in proportion under the joint venture agreement by approximately Baht 470 Million. The Company hereby notifies that the Board of Directors Meeting No. 3/2008 which was held on May 12, 2008 resolved to grant approval for the Company to repay the bank loans of the Joint Venture BBCD by way of acceptance of assignment of the debt burden and accrued interest owed to the domestic lending banks, and when the Company has complied with the aforesaid conditions, the financial statements of the Company would be affected as follows: 1. The consolidated financial statements would show the net profit increased by approximately Baht 480 Million; 2. The Company's separate financial statements would show the net profit increased by approximately Baht 300 Million; 3. The Company's separate financial statements would show the liabilities increased by approximately Baht 3,064 Million; and 4. Liabilities in the consolidated financial statements would not be materially affected. In executing this transaction, the Company is required to additionally invest approximately Baht 3,179 Million,which is deemed the transaction of acquisition of the commitments of liabilities and equity under the equity method as specified in the joint venture agreement, with the transaction volume in accordance with the Stock Exchange of Thailand Notification regarding Disclosure of Information and Acts of Listed Companies on Acquisition or Disposition of Assets B.E. 2547 (2004) representing 12.67 percent on the basis of the total value of consideration. As at March 31, 2008, the Company and its subsidiaries had the total assets amounting to Baht 25,178 Million and upon combination of the transaction of acquisition of assets of the Company during six months, on the basis of the total value of consideration, representing 12.81 percent of the total value of the total assets of the Company, with the following details: 1. Transaction Date and Related Parties 1.1 Transaction Date - By March 31, 2008 for execution of the transaction with Bangkok Bank Public Company Limited - By the year 2008 for execution of the transactions with TMB Bank Public Company Limited and KASIKORNBANK Public Company Limited 1.2 Related Parties 2 Lenders/Creditors: TMB Bank Public Company Limited Bangkok Bank Public Company Limited KASIKORNBANK Public Company Limited Debt Assignee: CH. Karnchang Public Company Limited Relationship with Listed Companies: -None- 2. General Characteristics of Transaction In executing this transaction, BB, as partner and creditor of the Joint Venture BBCD, was willing to waive its right of claim for the debt repayment of Euro 70 Million or approximately Baht 3,501 Million (at the exchange rate as at March 31, 2008) in exchange for the Company's acceptance of the assignment of the debt burden and accrued interest owed to the domestic lending banks of the Joint Venture BBCD and the Company will gradually extend the loan to the Joint Venture BBCD for the Joint Venture BBCD to repay the loan debt to BB in the total amount of approximately Euro 13.5 Million or approximately Baht 675 Million as per the loan repayment schedule, which shall be settled by the year 2010 in proportion representing 35 percent under the joint venture agreement. According to such aforesaid arrangement, the Company is required to additionally invest approximately Baht 3,179 Million or representing 31.38 percent only which is lower than 35.00 percent held by the Company in the Joint Venture BBCD by 3.62 percent or the Company received the allocation less than the debt burden of the Joint Venture BBCD in proportion under the joint venture agreement by approximately Baht 470 Million. 3. Details of Acquired Assets 3.1 Burden of loans with Thai financial institutions, i.e., TMB Bank Public Company Limited, Bangkok Bank Public Company Limited and KASIKORNBANK Public Company Limited, with the principal and accrued interest as at March 31, 2008 amounting to Baht 2,389 Million. 3.2 Burden of payment of Euro 13.50 Million or approximately Baht 675 Million to the Joint Venture BBCD. 3.3 Other debts, with the total amount as at March 31, 2008 of approximately Baht 114 Million. 4. Total Value of Consideration and Value of Acquired Assets The Joint Venture partners agreed to allocate the debt burden of the Joint Venture BBCD in proportion in the Joint Venture, whereby the Company received the allocated burden to pay the debt and accrued interest owed to the domestic lending banks and the creditor of the Joint Venture in the amount of approximately Baht 3,179 Million, representing 31.38 percent only which is lower than 35.00 percent held by the Company in the Joint Venture by 3.62 percent or the Company received the allocation less than the debt burden of the Joint Venture BBCD in proportion under the joint venture agreement by approximately Baht 470 Million. 3 5. Conditions for Approval for Execution of Transaction The transaction volume on the basis of the total value of consideration represented 12.67 percent and upon combination of the transaction of acquisition of assets of the Company during six months, on the basis of the total value of consideration, representing 12.81 percent of the total value of the total assets of the Company, which is not fallen into the minimum requirements under the Stock Exchange of Thailand Notification regarding Rules, Procedures and Disclosure on Acquisition or Disposition of Assets of Listed Companies. Therefore, the execution of the transaction requires only approval of the Board of Directors and is subject to the report and disclosure of the transaction to the Stock Exchange of Thailand. 6. Opinion of the Board of Directors towards the Transaction Regarding approval for execution of the transaction, the Board of Directors was of view that the Company would benefit from its compliance with the joint venture agreement for maintaining the good relationship between the Company and the Joint Venture partners. Additionally, should the Company fulfill the agreement to assume all debt burdens owed to the domestic financial institutions, Bilfinger Berger AG, as creditor of the Joint Venture, would be willing to waive its right of claim for the debt repayment in the amount of Euro 70 Million or approximately Baht 3,501 Million (at the exchange rate as at March 31, 2008) from the Joint Venture BBCD, thereby resulting in recognition of revenue in the consolidated financial statements of the Company from the allocation of the burden of debt and net equity of the Joint Venture BBCD in the amount of approximately Baht 480 Million, as well as minimizing risk from exchange rate in respect of Euro-denominated debt burden, including benefit from reversal of provision for loss of the Joint Venture BBCD as previously booked in the amount of approximately Baht 300 Million to accounting profit in the Company's separate financial statements. 7. Opinion of the Audit Committee or Other Directors which Differs from the Opinion of the Board of Directors - None - Please be informed accordingly. Very truly yours, -Signature- (Mr. Prasert Marittanaporn) Director and Executive Vice President Accounting and Finance 4