Thai Airways International PCL : 25 Aug 2016 Disclosure of Information Concerning Connected Transactions

Thai Airways International Public Company Limited

89 Vibhavadi Rangsit Road, Bangkok 10900, Thailand

Tel : 66 (0) 2545·1000, 66 (0) 2695·1000

Registration Number O I0753700 1757

Gor Bor 07I 1-,{

(Translation)

1. August 2016

   Subject: Disclosure oflnformation Concerning Connected Transactions To President, the Stock Exchange of Thai land

   Re: Thai Airways' letter Gor Bor 07/080 dated 6 July 2016

   Pursuant to the Board of Directors' Meeting of Thai Airways International Public Company Limited ("the Company") No . 7/2016 on 6 July 2016, the Company was approved the connected transaction with the Ministty of Finance ("MOF"), who is the major sharehold er of the Company which is considered to be a connected person of the Company according to Notification of the Capital Market Superviso1y Board in case the Company has plans to roll-over the existing on-lending loan from the MOF, in the form of Euro Commercial Paper (ECP) by August 20 16. On 24 May 2016, the Cabinet approved the On-lending Transaction by the MOF to the Company. Details are as follows;

2. Date of transaction and related parties

Date of transactio n Tranche 4: 25 July 2016 Tranche 5: 3 August 2016

Tranche 6: 24 August 2016

Relevant Parties

Borrower Thai Airways International Public Company Limited

Lender The Ministry of Finance

1. . Details of the transaction

   The MOF bo1rnws money by issuing Euro Commercial Paper (ECP) under the ECP Programme with the objective of on-lending to the Company. At present the Company decides to roll over such ECP wh ich were drawn on Janua1y and February 2016 in the amount totaling MUSD 150 and has already repaid the princip le at maturity.

   Term Tranche 4: 182 days (25 Ju ly 2016 - 23 Janumy 20 17)

   Tranche 5: 189 days (3 August 2016 - 8 Februaty 20 17)

   Tranche 6: 189 days (24 August 2016 - I March 2017)

   Interest Rate Fixed Interest Rate (based on USD Libor + Spread on each issue

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   0

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   A STAR ALLIANCE MEMBER .::

   date under book buildin g process).

   ....2/ Fee

   Fee On-lending Fee is indicated by the MOF for the on-lending transaction to be provided to State Enterprises.

2. Total value of transaction and criteria for valuing and payment method

   • Total value of the transaction includes interest expenses and approxi1nate On-lending Fee is USD 1,071,850.02 equivalent to THB 37,322,455.85 (reference exchange rates from the Bank of Thailand on 25 July 2016 at USD/THB = 35.013 for Tranche 4, 3 August 2016 at USD/THB = 34.822 for Tranche 5 and 24 August 2016 at USD/THB = 34.650 for Tranche 6).

   • Criteria for valuing

     According to Notification of the Capital Market Supervisory Board No. TorChor. 21/2551 Re: Rules on Connected Transactions, entering into this transaction to be considered as Connected Transactions which provides financial benefits. With reference to the Company's Financial Statement, total value of this transaction is 0.1 1% of book value of Net Tangible Asset for the period ending 30 June 2016 in addition total value of this transaction together with the approved financing amount for the last 6 months is 0.17% of book value of Net Tangible Asset for the period ending 30 September 2015. There are over 0.03% but not over 3.00% of book value of Net Tangible Asset. Total value of this transaction includes total interest expenses plus approximate On-lending Fee which shall be paid to the Lender through the te,m of ECP loan. The transaction shall be approved by the Board of Directors and details of the transaction is to be disclosed to the Stock Exchange of Thailand without any approval from the shareholders.

   • Method of Payment

     Principal Repayment :

     Interest Payment : On-len din g Fee:

     Payment on behalf of the MOF to Citibank N.A. as the Issue/Paying Agent at the

     1naturity. Discounted fro111 the loan received on issue dates of each tranche.

     Payment to the MOF.

3. Relationships with related parties

• The Minist1y of Finance is a major shareholder and has legal control of the business, holding of I , 1 13,931,061 shares ora 51.03% stake in the company.

• Mr. Somchai Sujjapongse, Board of Director currently holds the position of Pe1manent Secretary of the Minist1y of Finance.

.. ..3/5. Description and

5. Description and scope of the related transaction.

The MOF borrows money by issuing Euro Commercial Paper (ECP) under the ECP Programme with the objective of on-lending to the Company for rolling-over the ECP Loan from the MOF upon maturity of Loan. The Company has to pay interest and On-lending Fee to the MOF.

1. Potential Conflict oflnterest to the Company's shareholders

   -none-

2. Benefits to the Company

The Company can reduce its cost of capital and proceed to sell Aircraft according to the Thai

Airways' 1ransfonnation Plan. 8. The connected person does not participate in the Board of Directors' 1nccting and has no voting

rights on this agenda.

Mr. So1nchai Sujjapongse, the connected person did not pa1ticipate in the Board of Directors' 111ceting and had no voting rights on this agenda.

9. The resolution of the Board of Directors

The Board of Directors, other than the connected person, approved the transaction which is considered to provide benefits to the Company in terms of the lower cost of capital and the Company can proceed to sell Aircraft according to Thai Airways' Transformation Plan.

1 0. Other Opinions fi·o1n the Audited Co1n1nittee and/or other co1nrnittccs with regard to the transaction -none-

Please be informed accordingly.

Yours Sincerely,

(Mr. Narongchai Wongthanavimok)

Executive Vice President, Finance and Accounting Fund Dcpart1nent

Tel: 0-2545-2486

Fax: 0-2545-3702