NOTIFICATION OF INFORMATION OF CROSS RELATED TRANSACTIONS
05 January 2000
Ref. TP-MT-001/43(FC001/43)
January 4, 2000
Subject: Notification of Information of Cross Related Transactions
Attention: Director and Manager,
SET
Referring to Thantawan Industry Public Co., Ltd. (THIP)'s letter no.TP-
MT/129/99 (FC179/99) dated November 25, 1999 reporting on Board of
Directors' Meeting, no. 13/2542 pertaining to item 3 (Others Agenda) which
had a minute in item 3.6 authorizing power to Managing Director as the
negotiator and signer of all related land leasing agreements together with a land
and building leasing agreement, as had reported to SET accordingly.
Currently, THIP had entered into 3 land leasing agreements with
Sunflower Enterprise Co., Ltd. (SE) who is the major shareholder indirectly by
holding shares in Sunflower Company (SC) at the rate of 93.99%. And SC is
the major shareholder in THIP at the rate of 56.39%. The purpose of land
leasing is to use as office building having total areas of 3,700 square meters and
as the site of manufacturing factories having total areas of 12-2-42 rai or as
total 5,042 square wah. The agreements were entered into on January 4, 2000
having total leasing amount in year 2000 for Baht 8,353,200 (Eight Million
Three Hundred Fifty Three Thousand and Two Hundred Baht Only). The
summary details of leasing agreements are as followings:
1st Agreement, Leasing of Land and Building, no.LG/SE/0009/1999
THIP has leased a land plot with title deed no. 55727 having total areas:
1-3-94 rai or as 794 square wah together with a building having total areas of
3,700 square meters at the rate of Baht 120 per sq.m. per month which is
accounted as total rent of Baht 444,000 per month for one year term starting on
January 1, 2000 and ending on December 31, 2000 in which accounted as total
leasing amount of Baht 5,328,000 per year. THIP also received the
commitment for agreement renewal right on a year by year basis continuously
for next 2 years including the commitment that if SE would like to selling this
leased land plot, THIP will get the first right of refusal before other interested
parties on the same offered price and conditions of selling to general interested
parties.
2nd Agreement, Land Leasing, no.LG/SE/0010/1999
THIP has leased a land plot with title deed no. 56216 having total areas:
2-2-0 rai or as 1,000 square wah at the rate of Baht 50 per sqare wah per month,
accounted as total rent of Baht 50,000 per month or as total Baht 600,000 per
year for the same leasing term together with agreement renewal commitment
and the first right of refusal as described in the above 1st Agreement.
3rd Agreement, Land Leasing, no.LG/SE/0011/1999
THIP has leased 3 land plots with title deed no.: 87666, 50428, and
12369, having total areas: 10-0-42 rai or as 4,042 square wah at the rate of Baht
50 per sq.wah per month or accounted as total rent of Baht 202,100 per month
or as total Baht 2,425,200 per year for the same leasing term together with
agreement renewal commitment and the first right of refusal as described in the
above 1st Agreement.
Due to the entering into those above 3 land leasing agreements is
considered as the cross related transaction according to SET's announcement
on Criteria, Method, and Disclosure of the Cross Related Transaction of Listed
Company which having transaction size amounting over 2.29% of book value
of net tangible assets as of September 30, 1999, hence, THIP shall disclose the
information of this transaction to SET at once and shall publicly advertise the
transaction and the translated information in newspaper.
However, SET had considered on combining such 3 transactions
occurred in year 2000 with the othe cross related transaction which is the
payment for back periods compensation for land plots utilization from 1994 to
1999 having total amount of Baht 6,500,000 in which causing the transaction
size being over 3% of book value of net tangible assets as of September 30,
1999, hence, THIP shall convene the meeting of extraordinary shareholders'
meeting on around February 28, 2000 for shareholders' approval of the said
transaction in complying with the SET's announcement.
Furthermore, THIP has very much realized for the responsibility and
transparency governance of business operations and has complied with required
steps of undertaking according to the announcement of SET, in which the
entering into these above leasing agreements, THIP has following justified
reasons:
1. The previous leasing agreement, title deed no. 55727 having total
areas of 1-3-94 rai together with a building of total areas of 3,700 square
meters, using for warehousing finished products and where currently has used
as office had expired its leasing term ended on December 31, 1999.
2. According to the MOU entered into and made on November 1999 had
stipulated that THIP was obligated to enter into the land leasing agreement
within 45 days of signing the said MOU.
3. As a result of signing the MOU stated in item 2, THIP had paid the
indemnification compensation amounting Baht 6,500,000 (Six Million Five
Hundred Thousand Baht Only).
Based upon the cited reasons and to enable THIP in carrying out its
business operations by preventing any serious damages which might bear loss
result to all shareholders, therefore, THIP had entered into leasing agreements
and shall convene for extraordinary shareholders' meeting for requesting
approval according to SET required steps in which has considered to include
this leasing transaction in the calculation the size of the cross related
transactions.
Please be informed accordingly.
Very truly yours,
Mr. Phietoon Trivijitkasem Mr. Pichai Tangwithetjit
Director Director
