Financial Assistant to a subsidiary company

Translation

Ref. AIT/07-130

March 19, 2007

Subject : Report of financial assistance to a subsidiary company

To : President The Stock Exchange of Thailand

Thai Factory Development Public Company Limited (TFD) currently holds 50.93 percent of Total Industrial Services Co Ltd (TISCOM)'s shares while the remaining 35 percent, 14 percent and 0.07 percent of its shares are held by the Industrial Estate Authority of Thailand (IEAT), JC Asset Co Ltd and other natural persons, respectively.

TISCOM had borrowed a total of Baht 130 million from Thai Military Bank Public Company Limited (TMB) for use in the Laem Chabang Project. This consisted of the Baht 100 million long-term loan, Baht 20 million Promissory Notes and Baht 10 million overdraft. The loan was given on a condition that TISCOM must not create any additional liabilities or obligations and that it must maintain its debt to equity ratio to be not over than 2:1 unless otherwise consented by TMB.

As the Laem Chabang Project was completed, TISCOM went on to construct a warehouse project in the area of Wat Kingkaew-Lat Krabang road closed to the new Suvarnabhumi Airport. This prevented TISCOM from maintaining the D/E as required by TMB, which subsequently agreed to relax its requirement on a condition that TFD must guarantee all types of TISCOM's loans it had with the Bank until TISCOM could keep its D/E ratio under 2:1. In addition, TISCOM was prohibited to borrow more in a new project.

The Board of Directors, at its Meeting No. 1/2550 held on 15 February 2007, considered the matter and was of the opinion that as TISCOM was currently expanding its investment and therefore needed additional capital, to allow TISCOM to continue its operation according to its investment plan together with the fact that IEAT is a government agency and therefore could not guarantee a private firm and that this is the bank's requirement, as a result, to avoid any effect to a normal operation of TISCOM, which is TFD's subsidiary company, the Board of Directors resolved to allow TFD to guarantee TISCOM's loan borrowed from TMB for an amount not exceeding Baht 100 million, which will not exceed the obligations it has at the moment.

Please be informed accordingly.

 

Sincerely yours,

(Ms. Siriporn Pinprayong)
Assistant Managing Director
Administration Information Technology