SET Announcements

On August 9, 2000 the Company entered into agreements with construction creditors for advance payment for construction in the amount of Baht 11.55 million, In summary, the Company and the creditors agreed to waive all liabilities due to them. As a result, the Company recognized loss of Baht 11.55 million. On August 9, 2000 a subsidiary company entered into agreements with construction creditors in the net amount of Baht 3.37 million, In summary, the Company and the creditors agreed to waive all liabilities due to them. As a result, the Company recognized gain in the amount of Baht 3.37 million. NOTE 10 - SETTLEMENT OF DEBTS WITH FINANCIAL INSTITUTIONS 10.1 As at March 10, 2000 the Company and 2 subsidiary companies agreed to repay outstanding loan and Interest expenses to the Asset Management Corporation in the amount of Baht 78.54 million. As of the date of debt repayment, March 30, 2000, the Company and subsidiary companies had the remaining principle and the outstanding interest in the amount approximately Baht 166.70 million and Baht 67.60 million, respectively. As a result, the profit from the debt restructuring were in the amount of Baht 155.76 million and Baht 49.20 million in the consolidated and the Company's financial statements, respectively. 10.2 On May 28,1999, the parent company and a subsidiary, as debtors, entered into a debt restructuring agreement with a financial institution, with two subsidiaries, as guarantors and also as guarantors against the repayment. As at March 31, 1999, the remaining principal and accrued interest of the Company were Baht 325.30 million and Baht 97.43 million respectively, and those of the subsidiary of Baht 15 million and Baht 3.92 million. In summary, the finance company agreed to purchase the increase share capital of the parent company, being 18 million ordinary shares at a price of Baht 5 per share totaling Baht 90 million and the parent company would use the proceeds to repay the debts of the subsidiary in the amount of Baht 15 million and interest payable up to March 31,1999 of Baht 2.48 million. As a result, the subsidiary realized gain on the assets transferred in settlement of debts in the amount of Baht 1.44 million. The remaining balance was divided into two parts, one for the payment of interest payable up to March 31,1999 of Baht 61.65 million, from which, the Company realized gain on the assets transferred in settlement of debts in the amount of Baht 35.78 million, and the other one for payment of the remaining interest payable up to July 31, 1999 of Baht 10.87 million. The finance institution had extended the repayment period for the remaining principal and reduce the interest rate. In addition, another financial institution' s claim from the Company will be bid within a certain period of time. Later June 26, 2000, the Company agreed to pay loan and accrued interest to the Fund, which won the bid for the financial institution's right to claim from the Company. Cash payment of Baht 24 million and debt payment fee of Baht 1.452 million was made already. The Fund then transferred such right to claim to the above financial institution under debt restructuring with the Company. Consequently, the Company agreed to make principal and accrued interest payment to the financial institution on June 29, 2000 with the principal balance as at the payment date of Baht 565.80 million and accrued interest of Baht 152.86 million. According to the agreement, the Company used the cost of its real estate development project and land under development of 2 subsidiaries that were collateral assets to pay debt of Baht 455.86 million with cash payment of Baht 36 million. When the Company complied with the agreement, the financial institution waived the remaining principal and interest to the Company. In addition, the financial institution will release the share certificate of subsidiary as collateral. This is resulted in profit from the debt restructuring of Baht 482.66 million Baht 170.58 million in the consolidated and the Company's financial statements. 10.3 On June 26, 2000, the two subsidiaries agreed to make loan and accrued interest payment to the Fund that won the bid for the financial institution's right to claim from the subsidiaries. The subsidiary had principal balance as at the payment date of Baht 142.06 million and accrued interest on the principal according to the rate specified in the loan agreement. The other subsidiary had the principal balance as at the agreement date of Baht 15 million and accrued interest on the principal according to the rate specified in the loan agreement. Under the agreement, one subsidiary shall pay loan of not less than Baht 72.36 million and debt payment fee of Baht 0.86 million while the other subsidiary shall pay loan of not less than Baht 7.64 million and debt payment fee of Baht 0.08 million. The first subsidiary transferred the right on 10 million shares to the Fund at the market price as at the date of transfer. According to the agreement condition, the Fund shall offer those assets for sale and the proceeds from such offering shall be used for debt payment. In the event that the Company has to offer the collateralized land title deed of the property development project for sale, the Fund shall release the pledge so that the proceeds shall be used for payment to the Fund in the amount of not less than Baht 50 million. Such release of collateralized assets requires that the subsidiary must have a bank letter of guarantee for debt payment to the two subsidiaries in the amount of not less than Baht 80 million if the proceeds from such sale are less than Baht 80 million. In case the net value of less than 80 million, the two subsidiaries shall be responsible for such difference If the proceeds exceed Baht 80 million, the Fund shall refund for the difference to the subsidiary. The agreement and conditions are due within December 15, 2000. On July 27, 2000, the Company already transferred proceeds from sale of the land and property development project in the amount of Baht 50 million and already submitted the letter of guarantee to the Fund. In the third quarter, the fund used partial proceeds from securities disposal and sale of property development project to pay loan payment for 2 subsidiary companies in the total amount of Baht 72.54 million, resulting in loss from the debt settlement in the amount of Baht 32.03 million. 10.4 On September 1, 2000, the Company, as a debtor and the subsidiary as a guarantor, entered into a debt restructuring agreement with a local commercial bank for the outstanding balance, as at June 30, 2000, of Baht 16.15 million. According to the agreement, payment shall be made via transfer of the land under development of the guarantor in the amount of Baht 11.18 million. The Company gained profit from the land transfer for debt payment in the amount of Baht 4.97 million while the subsidiary incurred loss of Baht 26.48 million from the transfer of such land with the book value of Baht 37.66 million. 10.5 On September 1, 2000, a subsidiary company entered into a debt restructuring agreement with a commercial bank. As at June 30, 2000, such debt included a principal of Baht 223.42 million and accrued interest of Baht 109.35 million. According to the agreement, the subsidiary shall transfer its leasehold right on the Lang Suan project of the Bureau of the Crown Property to the amount of Baht 130.97 million of which Baht 30 million shall be paid by cash and used by the bank to subscribe for the increased share capital of the parent company in the amount of Baht 5 million shares at Baht 5 par value. Upon achievement of all conditions, the subsidiary agrees to make principal payment of Baht 99.85 million and interest by installments as follows: 1st - 2nd years: Monthly interest payment at the rate of 6 % per annum. 3rd - 5th years: Monthly principal payment in the amount of no less than Baht 2.80 million and interest payment at MLR per annum. Upon completion of payment by installments, the subsidiary will be released from the remaining outstanding debts. As at September 30, 2000, approval of the transfer of leasehold right on the Lang Suan Project from the Bureau of the Crown Property is underway. NOTE 11 - SHARE CAPITAL The Board of Directors' Meeting, on September 27, 2000, it was resolved to offer increased share capital for sale totaling 5 million ordinary shares to a local bank at Baht 5 per share. As at September 30, 2000, premium on share capital is stated net of discount on share capital and expenses in relation to increased share capital. NOTE 12 - LONG-TERM DEBTS Long-term debts, consisted of: (Amounts : Thousand Baht) Consolidated The Company September 30, 2000 December 31, 1999 September 30, 2000 December 31, 1999 Loans from finance companies 196,052 338,697 - - Less current portion of long - term debts (196,052) (338,697) - - - - - - Parent Company - In the third quarter of 2000, the Company obtained loan facility from a bank of Baht 30 million for property development which principal will be repaid within 5 years. Interest is payable monthly. Land under property development will be pledged as collateral. Subsidiaries - Loan facility from finance company of US$ 12 million for developing Baan Ploenchit is due in 1997. Interest is payable quarterly at the rate of LIBOR+3.5% per annum. - Loans facility from finance company of Baht 275 million for developing Baan See Tis is due in 1998. interest is payable monthly at the rate of MLR + 0.5% per annum. - Loans facility from finance companies of Baht 476 million for developing Luang Suan due within 12 years commencing on the date of signing contract, with three year grace period. Interest is payable monthly at the rate of MLR+1% per annum. Current portion of long - term debts is presented as a current liability. NOTE 13 - ASSETS PLEDGED AS COLLATERAL 1. In 1999, land including existing construction and land under development of the parent company were pledged as collateral for loans from finance companies and banks. 2. In 1999, land including existing construction and certain land under development of subsidiaries were pledged as collateral for loans from finance companies and banks. 3. Leasehold of property development project of subsidiary is pledged with finance companies and banks as collateral. 4. Parts of fixed deposits are pledged to secure letters of guarantee issued by banks. NOTE 14 - DEFAULT OF DEBTS The parent and subsidiary companies were in default of bank overdraft, loans and accrued interest as follows: (Amounts in Thousand Baht) Principal Interest Payable September 30, December 31, September 30, December 31, 2000 1999 2000 1999 Parent company - 302,147 - 143,888 Subsidiaries - 468,571 - 205,218 Total - 770,718 - 349,106 The companies entered into the restructuring debt agreement with financial institutions. (See note 10 to financial statements) NOTE 15 - COMMITMENTS AND CONTINGENCIES 1) As at September 30, 2000, the Company had commitments resulting from project construction agreements of Baht 186.90 million in the consolidated and the Company's financial statements and from letters of guarantee issued by bank of Baht 33.08 million and Baht 30.48 million, in the consolidated and the Company's financial statements, respectively. As at December 31, 1999, the Company had commitments resulting from project construction agreements of Baht 2.46 million and Baht 0.75 million in the consolidated and the Company's financial statements, respectively, and from letters of guarantee issued by bank of Baht 4.27 million and Baht 2.43 million, in the consolidated and the Company's financial statements, respectively. 2) As at September 30, 2000, a subsidiary had a commitment to sell investments of approximately Baht 3.40 million in order to repay debt to the parent company according to the letter regarding the restructuring debt of Baht 3 million. The subsidiary repaid this debt to the parent company on October 20, 2000. 3) On August 7, 2000, the Company entered into a sale and purchase agreement with a company. According to the said agreement, 250,000 shares in Point Asia Access Limited of the Company in the amount of Baht 27 million will be transferred for 38,000 ordinary shares in the said company on by August 31,2000. After the exchange of those shares, the Company will have 70 % shareholding in the said company and have 30 % shareholding in Point Asia Access limited. 4) On August 7, 2000, the Company entered into a sale and purchase agreement with a company. According to the said agreement 30,000 shares in Sansiri Home Network Co., Ltd of the Company will be transferred to that company which have to issue new shares of 62,000 shares in return. The condition specified in the agreement will be made within 6 months from the date of the agreement. 5) As at September 30, 2000, the Company, as co-defendant, had contingent liabilities from lawsuits for repayment of principal and interest in the amount of Baht 18.24 million on the basis that the creditor of the Company has breached the agreement. The case is now under trial. The contingent liability has been recognized in the financial statements in full amount. 6) As at September 30, 2000 , the parent company and subsidiaries had contingent liabilities arising from being sued by seven customers who are demanding a refund of both principal and interest, of approximately Baht 2.47 million and Baht 3.36 million, respectively, and the Company and subsidiaries, as co-defendant in the amount of approximately Baht 4.43 million, arising as a result, the companies have breached in the contract, defraud and thief. The litigation is under consideration of the court. The parent company and subsidiaries recognized the said contingent liabilities in the financial statements in full amount. 7) As at December 31, 1999 the Company had commitments resulting from purchase and sales land and construction agreements of Baht 185.67 million. The Company already paid on January 25, 2000. 8) On December 20, 1999, a subsidiary company entered into the purchase and sales land and construction agreement with a person in the amount of Baht 19.82 million. The land has been under the servitude, which was registered under the letter of servitude on October 19, 1990. The Company and the seller agreed to transfer the right on April 26, 2000 by changing the owner's right from the subsidiary to the Company. 9) The Company had commitments resulting from a subscription agreement and a debt repayment agreement with Starwood Thailand Corporation in March 2000. The said company can subscribe, or designated party, to subscribe for shares in the Company under the agreements and the Company's regulation, up to 51% of total issued shares by December 31, 2002. The significant descriptions in the subscription agreement are as follows: - First subscription shares will amount to 8,000,000 newly issued ordinary shares, at Baht 5 per share - Second subscription shares are subject to fulfillment or waiver of the applicable further conditions in the agreement and subject to the Debt Repayment Agreement. The subscriber subscribes 32.4 million ordinary shares at Baht 10 per share, which is equal to the amount of the principal component of the relevant indebtedness. The subscriber shall pay the said subscription share by transfer funds into the Company's Bank Account. - The subscriber can subscribe 8 million shares at Baht 5 per share for the third subscription shares. - Fourth subscription shares were subject to fulfillment or waiver of the applicable further conditions in the agreement. The subscriber can subscribe the remaining shares under the agreement by December 31, 2002. - In the case of the above subscription shares, the payment for those shares are transferred into the Company's bank account. If the Company is unable to issue a number of ordinary shares at Baht 5 per share. The Company and Starwood agree to issue any other securities instead. If the Company and Starwood can not agree for the issue of any securities to achieve the Commercial Goal. Starwood may subscribe the ordinary shares at Baht 10 per share (or the minimum par value (not being less than Baht 5) permitted by the Listing Rules of the SET). If Starwood applies for a subscription of shares, the Company shall, subject to all applicable laws, be liable to provide the economic benefit equal to the excess of the total subscription price paid by Starwood to achieve the Commercial Goal. As stated in the agreement, the Company agrees that a juristic company under the agreement shall hold all of the equity interests in an asset company (Assetco). From the date of its formation, the Asset company shall pay an annual asset management fee to the Company equal to 0.375% of asset company's gross invested amount (equity and debt), as the same shall vary from time to time provided however that, for the first year, and, if Starwood shall have subscribed for 8,000,000 shares, then also for the second year, the Annual Management Fee shall be equal to the aforesaid sum, less Baht 40,000,000 (but in no case less than zero). The significant descriptions in the Debt Repayment Agreement are as follows: 1) Starwood propose to accept the transferred debt of the Company, according to the loan agreements between the Company or its subsidiaries and the financial institutions. 2) Starwood has the right to request the Company to issue the ordinary shares for sale to Starwood totaling in the amount equal to the total of the transferred debt, under the condition that the Company will repay the transferred debt to Starwood after Starwood has completed to subscribe the above shares. 3) After complying with the condition in the Agreement, Starwood or the Company may send a prior notice to inform the other to pay or receive a payment for transferred debt. In the case that the Company requests Starwood to repay the transferred debts, Starwood has the right to request the Company to repay to Starwood instead of applying for subscription. 4) Starwood agreed not to request the Company or its subsidiaries to pay debts to Starwood or to take any legal action for the debts, provided that the Company must not breach the above Subscription Agreement or Debt Repayment Agreement. NOTE 16 - LONG-TERM LEASE AGREEMENTS 1. On December 20, 1999 the Company made a lease contract of land and construction with a person, covering 15 years between January 1, 2000 and December 31, 2014, with total value of Baht 54 million. On the annual basis, payment of rent is made on the 10th of January according to the following details: 1. Rent of the period between January 1, 2000 and December 31, 2004 is Baht 3.0 million per annum. 2. Rent of the period between January 1, 2005 and December 31, 2009 is Baht 3.6 million per annum. 3. Rent of the period between January 1, 2010 and December 31, 2014 is Baht 4.2 million per annum. The lessor postponed registration of the lease for 80 days as the name of the owner of partial construction had not yet replaced with that of the lessor. whereby the construction under lease was possessed by the existing lessee, therefore on December 20, 1999 the Company and the existing lessee, made a memorandum of understanding in a way that the existing lessee was requested to prematurely terminate the building lease contract made with the lessor so that the Company would rent property and land in the vicinity from the lessor. Then the Company agreed to compensate the existing lessee for the lost benefit from prematurely terminating the building lease contract made with the lessor and the Company agreed to purchase the property used in subleasing the rooms for rent in the amount of Baht 1.07 million and will pay partial compensation of Baht 0.2 million on the date of contract. As at March 31, 2000 the Company had already paid in full amount. On April 5, 2000, the Company made an agreement to lease partial land. 2. The Company entered into a rental agreement with a related company for office accommodation and for rent for a period of 30 years from June 1, 1994 to May 31, 2024. At the date of signing the agreement the Company paid total rental amount in amount of approximately Baht 548.57 million. At the end of the contract, the Company must return the assets to the lessor. The Company can not request anything from the lessor under the agreement. 3. A subsidiary company entered into a land rental agreement with the Royal Palace Office for construction of condominium for the Baan Sansiri Project for a period of 30 years from November 1, 1993. At the date of signing the agreement, the Company had made a lumpsum payment for rental in amount of Baht 117.70 million. NOTE 17 - RECLASSIFICATION Certain transactions in the 1999 financial statements have been reclassified to conform to the 2000 financial statements presentation. NOTE 18 - YEAR 2000 ISSUES (UNREVIEWED BY THE AUDITOR) As of November 3, 2000 the Company has not experienced any significant disruptions to the financial or operating activities caused by failure of the Company's computerized systems resulting from Year 2000 (more)