Thai Airways PCL : 06 Jul 2016 Disclosure of Information Concerning Connected Transactions

bd67b53d-5bbe-47d3-bf28-271f9450f4db.pdf THAI

Thai A irways International Public Company Limited 89 Vibhavadi Rangsit Road, Bangkok 10900, Thailand Tel : 66 (0) 2545-1000, 66 (0) 2695-1000

Registration N umber 0107537001 757 Gor Bor 07I C>io

(Translation)

{, July 2016

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

Pursuant to the Board of Directors' Meeting of Thai Airways International Publ ic Company Limited ("the Company") No. 7/2016 on 6 July 2016, the Company has approved the connected transaction with the Minist1y of Finance ("MOF"), who is the major shareholder of the Company which i s 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 Commercia l Paper (ECP) by August 2016. On 24 May 2016, the Cabinet approved the On-lending Transaction by the MOF to the Company. Details are as follows;

I. Date of transaction and related patties

Date of transaction Within August 2016 Relevant Patties

Borrower Thai Airways International Public Company Limited

Lender The Ministry of Finance

1. Details of the tran saction

   The MOF borrow s money by issuing Euro Commercial Paper (ECP) under the ECP Programme with the objective of on-lending to the Company for the purpose of rolling over of On-lending Loan in the form of ECP for which the Company borrowed from the MOF on Jan uary and Februa1y 201 6 in the amount totaling MUSD 150.

   Term No more than I year

   Interest Rate Fixed Interest Rate (based on USD Libor +Spread on each issue date und er book building proces s).

   Fee On-lending Fee is the rate indicated by the MOF for the on- lending ,tran saction to be provid ed to State Enterprises.

   (") (X) N

   0

   0

   0

   0

   A STAR ALLIANCE MEMBER

   v;>

   ....2/3. Tota l value

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

   • Total value of the transaction and 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. The total value of this transaction is estimated to exceed 0.03% but not exceed 3.00% of book value of Net Tangible Asset referencing to the Company's Financial Statement for the period ending 31 March 201 6. The total value of this transaction together with the approved financing amount for the last 6 months is estimated to exceed 0.03% but not exceed 3.00% of book value of Net Tangible Asset. Total value of this transaction includes total interest payment and On­ lending Fee payment to the lender for the term of the 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 : Payment on behalf of the MOF to Citibank N.A. as the Issue/Paying Agent.

     Interest Payment : On-lending Fee:

     Discounted from the loan received on issue dates of each h·anche. Payment to the MOF.

3. Relationships with related parties

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

   • Mr. Somchai Sujjapongse, Board of Director currently holds the position of Permanent Secretary of the Ministry of Finance.

4. 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.

5. Potential Conflict oflnterest to the Company's shareholders

   -none-

6. Benefits to the Company

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

   ,

   Airways' Transformation Plan.

   . . ..3/8. The connected

7. The connected person does not participate in the Board of Directors' meeting and has no voting rights on this agenda.

   Mr. Somchai Sujjapongse, the connected person did not participate m the Board of Directors' meeting and had no voting rights on this agenda.

8. The resol ution 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.

I 0. Other Opinions from the Audited Committee and/or other committees with regard to the transaction

-none-

Please be informed accordingly.

Yours Sincerely,

(Mr. Narongchai Wongthanavimok) Executive Vice President,

Finance & Accounting

Corporate Finance Department

Tel: 02-545-2486; Fax: 02-545-3702

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