SET Announcements

(Translation) Information Memorandum on Disposition of Shares in Thai Tap Water Supply Public Company Limited The Board of Directors Meeting No. 6/2009 of CH. Karnchang Public Company Limited, held on December 21, 2009, resolved that the Company sold ordinary shares in Thai Tap Water Supply Public Company Limited, as per the following details: 1. Transaction Date After receipt of approval from the Board of Directors Meeting for execution of the transaction. 2. Contractual Parties Seller : CH. Karnchang Public Company Limited Purchaser : Persons and/or legal entities which have no relationship and/or connection with the Company, directors, executives or related parties or shareholders of the Company, the Company shall notify name(s) of purchaser(s) immediately when the Company has signed the Share Purchase Agreement, and the Company shall then report the same through the system of the Stock Exchange of Thailand. Amount of Shares : 180,000,000 shares or 4.51 percent of the registered capital Transaction Value : At the price of not less than Baht 4.15 per share or not less than Baht 747,000,000, whereby it is currently in the process of negotiation on details of the Share Purchase Agreement. The Company expects that the selling price will be declared immediately upon the Company's execution of the Share Purchase Agreement, and the Company shall report the same through the system of the Stock Exchange of Thailand accordingly. Relationship : Persons having no connection with the Company. 3. General Characteristics of the Transaction The Company intends to sell 180,000,000 shares in Thai Tap Water Supply Public Company Limited to any persons and/or legal entities which have no relationship and/or connection with the Company, directors, executives, or related parties or major shareholders of the Company, at the price of not less than Baht 4.15 per share, representing not less than Baht 747,000,000, which is the average closing price of such shares for 15 business days prior to the Board of Directors Meeting. In addition, as it is currently in the process of negotiation on details of the Share Purchase Agreement, the Company expects that the selling price will be declared immediately upon the Company's execution of the Share Purchase Agreement. 1 The volume of the disposition of such shares in Thai Tap Water Supply Public Company Limited shall represent 40.22 percent which falls into category 2 in accordance with the calculation based on net profit from normal operations after deduction of taxes incurred from such acquired or disposed assets, as compared with the net profit of the listed companies in accordance with the Stock Exchange of Thailand Notification, Re: Disclosure of information and Acts of Listed Companies Concerning Acquisition or Disposition of Assets B.E. 2547 (2004). In this regard, the Company shall give written notice to the shareholders within 21 days from the date of disclosure on such transaction to the Stock Exchange of Thailand. 4. Details of Disposed Assets A. Nature of Business Name : Thai Tap Water Supply Public Company Limited Address : 30/10 Moo 12 Tambon Rai Khing, Amphoe Sam Phran, Nakhon Pathom Province Nature of Business : Production and distribution of tap water to the Provincial Waterworks Authority (PWA) in the areas of Amphoe Nakhon Chaisri, Amphoe Sam Phran and Amphoe Phutthamonthon in Nakhon Pathom Province and in Amphoe Mueang Samut Sakhon and Amphoe Krathum Baen in Samut Sakhon Province. The tap water is intended to replace the groundwater used by the private sector and the PWA's production of tap water from groundwater wells. In addition, the Company aims to increase tap water production capacity to meet the constantly growing demand, thereby solving the problem of land subsidence and the intrusion of saline water into the underground aquifers in line with the Government's policy. Thai Tap Water Supply Co., Ltd. was incorporated on September 11, 2000, to operate business of management and development of land for the purpose of operation in accordance with the tap water production and distribution project as jointly invested between CH. Karnchang Public Company Limited and Thames Water Group holding shares representing 50 percent and 50 percent, respectively, with the registered and paid-up capital of Baht 100,000 (at the par value of Baht 100 per share). Subsequently, the Company entered into the Water Purchase and Sale Agreement with PWA on September 21, 2000, with a term of 30 years from July 21, 2004 to July 20, 2034, on a Build, Own and Operate ("BOO") basis. The Company is the owner of the tap water production and distribution systems which are not required to be transferred to PWA. In addition, the Water Purchase and Sale Agreement specifies that the Minimum Offtake Quantity ("MOQ") that PWA must purchase from the Company throughout the period of 30 years on a MOQ basis which increases throughout the term of the Agreement. 2 The Company was converted into a public limited company on July 6, 2006, under the name "Thai Tap Water Supply Public Company Limited", and offered for sale of shares for capital increase to the public and listed on the Stock Exchange of Thailand on May 22, 2008. At present, the Company has the registered and paid-up capital of Baht 3,990 Million, divided into 3,990 ordinary shares, at the par value of Baht 1 per share. B. Board of Directors of Thai Tap Water Supply Public Company Limited The Board of Directors of Thai Tap Water Supply Public Company Limited currently comprises a total of 12 members as listed below: 1. Mr. Thanong Bidaya Chairman of the Board of Directors 2. Mr. Sompodh Sripoom Managing Director 3. Mr. Plew Trivisvavet Director 4. Mr. Narong Sangsuriya Director 5. Mr. Suvich Pungchareon Director 6. Mr. Prasert Marittanaporn Director 7. Mr. Sombat Kitjalaksana Director 8. Mr. Koichi Wakana Director 9. Mr. Kazushige Katamura Director 10. Mr. Techapit Sangsingkeo Director and Chairman of the Audit Committee 11. Mr. Phairuch Mekarporn Independent Director and Audit Committee Member 12. Mr. Somnuk Chaidejsuriya Independent Director and Audit Committee Member C. Shareholding Structure List of top ten shareholders as at the latest record date of shareholders as at June 16, 2009 was as follows: Shares % 1. CH. Karnchang Public Company Limited* 1,408,777,400 35.31 2. Mitsui Water Holdings (Thailand) Co., Ltd. 1,032,500,000 25.88 3. Bangkok Expressway Public Company 368,750,000 9.24 Limited 4. HSBC (Singapore) Nominees Pte Ltd 202,992,100 5.09 5. State Street Bank and Trust Company for 147,630,000 3.70 London 6. Bangkok Bank Public Company Limited 73,895,000 1.85 7. Thai NVDR Co., Ltd. 71,919,700 1.80 8. Chase Nominees Limited 1 61,141,000 1.53 9. State Street Bank and Trust Company for 31,327,000 0.79 Australia 10. American International Assurance Company- 25,000,000 0.63 APEX Total 3,423,932,400 85.81 3 Remark: *Should the Company have already sold the shares under the resolution of the Board of Directors,CH. Karnchang Public Company Limited would then hold 30.79 percent of shares. D. Summary of Financial Position The summary of the financial position and the results of operation of Thai Tap Water Supply Public Company Limited for 2007-2008 and for the first nine-month period of 2009, as audited and reviewed by the auditor, is as follows: (Unit: Thousand Baht) 2007 2008 2009 (Nine-Month Period) Current assets 2,142,230 1,940,997 2,945,157 Fixed assets 16,538,919 15,953,636 17,068,519 Total assets 18,681,149 17,894,633 20,013,676 Current liabilities 4,705,064 1,352,858 971,913 Long-term liabilities 9,261,312 8,205,391 10,747,469 Total liabilities 13,966,376 9,558,248 11,719,382 Registered and paid-up capital 3,990,000 3,990,000 3,990,000 Shareholders' equity 4,714,773 8,336,385 8,294,294 Total income 2,623,232 3,638,792 3,003,411 Cost of sales 780,802 1,176,902 879,647 Operating expenses 214,598 363,716 275,423 Interest expenses 670,583 728,699 489,239 Net earnings (loss) 920,052 1,358,407 1,188,627 Net earnings (loss) per share (Baht) 0.28 0.37 0.30 Number of shares (million) 3,990,000 3,990,000 3,990,000 The auditor of Thai Tap Water Supply Public Company Limited is Mr. Supachai Phanyawattano of Ernst & Young Office Limited. 5. Total Value of Transaction The transaction value of the disposition of shares in Thai Tap Water Supply Public Company Limited to other persons and/or legal entities which have no connection with the Company, totaling 180,000,000 shares, representing 4.15 percent of the company's registered capital, representing a total of not less than Baht 747,000,000, whereby it is currently in the process of negotiation. The Company expects that the selling price will be declared immediately upon the Company's execution of the Share Purchase Agreement, and the Company shall report the same through the system of the Stock Exchange of Thailand. 6. Value of Disposed Assets The assets disposed by the Company represent 180,000,000 ordinary shares in Thai Tap Water Supply Public Company Limited, at an audited book value of Baht 2.07 per share as at September 30, 2009. Therefore, the total value of the disposed assets amounts to Baht 372,600,000.00. 4 7. Plan for Utilization of Proceeds from Disposition of Assets The Company shall use the proceeds from the disposition of shares to be its working capital of the business and to accommodate the construction project in the future. 8. Basis of Calculation of the Share Price The price of shares in Thai Tap Water Supply Public Company Limited is fixed at the price of not less than Baht 4.15 per share, which is the average closing price of such shares for 15 business days prior to the date of the Board of Directors Meeting, whereby it is currently in the process of negotiation. The Company expects that the selling price will be declared immediately upon the Company's execution of the Share Purchase Agreement. Such price is mutually agreed upon between both contractual parties and is higher than the cost of purchase of such shares by the Company. The Company is of the view that such price is reasonable. 9. Benefits Expected to Be Obtained by the Company 1. The Company will receive the proceeds from the sale of its shares in Thai Tap Water Supply Public Company Limited and will use such proceeds as working capital in its business operations. 2. The Company expects to gain profits from the sale ofsuch shares since the cost is lower than the selling price of the Company. 10. Opinion of the Board of Directors The Board of Directors is of the view that the above disposition is reasonable and beneficial to the Company, as it shall give rise to value added to the Company, and the price is lower than the Company's cost. Therefore, such transaction is fair in terms of price and related conditions. 11. Opinion of the Directors which is different from Opinion of the Board of Directors under Clause 10. - None - The Company hereby certifies that the foregoing information is true and correct in all respects. Signed: (Mr. Plew Trivisvavet) Chief Executive Officer