SET Announcements

(Translation) Ref. No. SS./ 0967/ 2005 15 August 2005 Subject : Notification of the Establishment of Baan Sansiri Property Fund To : President The Stock Exchange of Thailand The Board of Sansiri Public Company Limited ("the Company") at its meeting No. 4/2005, held on 15 August 2005, has approved in principle to dispose its Land and Structure, including the furniture and appliances situated thereon, to Baan Sansiri Property Fund ("the Fund"), which will be established by ING Funds (Thailand) Company Limited. Therefore, the Company would like to notify the establishment of Baan Sansiri Property Fund to the SET as follows: The Fund will be established with an initial fund size of approximately Baht 865 million baht. The objective of the Fund is to raise fund from investors both individual and juristic persons from local and overseas. The proceeds from the offering will be used to invest by purchasing and/or leasing in real properties and to obtain yield from such properties. The properties in which the Fund will invest, will be the land and residential houses including the furniture and appliances situated thereon, totaling 25 units of Baan Sansiri Sukhumvit, situated at Soi Sukhumvit 67, Khwaeng Phra Khanong Nuea, Khet Wattana, Bangkok (the "Properties"). The Fund has a dividend policy to pay out at least 90% of net profit and no less than 2 times a year. In case the Fund pay out a dividend at 100% of net profit, the expected dividend yield is approximately 7% annually. Sansiri Public Company Limited as the owner of the Properties, will benefit from the proceeds derived from selling the Properties to the Fund. The proceeds will be utilized for the repayment of the outstanding debt and general working capital. However, after the selling of such Properties to the Fund and the Fund has already invested in the Properties, the Fund will initially obtain revenue such Properties as follows: 1. The Fund will enter into the agreement to lease the Properties to Sansiri Public Company Limited for the period of 5 years. The revenue from the lease of the said 25 units residential houses will be not less than 70 million baht per year. And/or the Fund may carry out the Existing Tenant, if any Existing Tenant would like to lease the residential houses directly from the Fund, in this case, the Fund may consider and appoint Sansiri Public Company Limited to act as the Properties Management of the said residential houses, in this regard, Sansiri Public Company Limited is still guarantee the Fund that the whole rental revenues of 25 units residential houses must be not less than 70 million baht per year throughout the period of 5 years from the date that the Fund invest in the said Properties. The rental revenues are the gross revenues before Fund's expenses. However, if the Fund sells out any units of the Properties or in case the asset management company cannot raise fund sufficiently to purchase all units of the Properties, the rate of rental payable to the Fund will be reduced in proportion. 2. At the expiration of the period of 5 years from the date that the Fund invests in the above-mentioned Properties, if the Fund wishes to sell certain or all units of its Properties, the Fund will firstly employs an opened bidding procedure giving a fair chance to any parties to purchase the Properties. In case the Fund had already proceeded as mentioned, but there is no purchaser or the purchaser offer to purchase at the price lower than the Fund purchased price, the Fund may exercise the right to call Sansiri Public Company Limited to buy back certain or all units of the Properties back (Put Option) at the price that the Fund had purchased as it may deem appropriate.. 3. In respect of the Properties which the Fund does not sell to any person and does not exercise the right to call Sansiri Public Company Limited to buy back (Put Option), upon the expiration of the 5-year lease term, the Fund and Sansiri Public Company Limited may enter into the lease Agreement subject to the condition which is suitable with the market at that time. 4. During the period of the fund scheme, the Fund may sell certain or all units of the Properties to the other person as the Fund may deem appropriated. In this regard, the Fund may either sell the Properties by itself or appoint Sansiri Public Company Limited or other persons to act as a selling agent or a broker to sell. Furthermore, at present, the Securities and Exchange Commission had been already approved the registration of the establishment of Baan Sansiri Property Fund having ING Funds (Thailand) Company Limited as the fund manager. The offering of investment units is expected to be made during the period between the end of August to the beginning of September 2005. And Sansiri Public Company Limited as the owner of the Properties is entitled to purchase and/or invest not more than one-third of the total issued investment units of the Fund for which the Chief Executive Officer and the President are assigned by the Board of Directors to make a decision on the said issues. However, upon the entering into the agreements in respects of the sale and the lease of the Properties and other relating matters with the Fund, the Company will further notify detailed information on the assets acquisition and disposition transaction to the Stock Exchange of Thailand. Please be informed accordingly. Yours sincerely, (Mr. Wanchak Buranasiri) Senior Executive Vice President