SET Announcements

1600/019/2541 March 30.1998 The Stock Exchange of Thailand 7th Floor, Sindhorn Tower 1 132 Wireless Road Bangkok 10330 Attention : Manager and Director Subject : The BCP agrees with the privatization of 31% stake to Thai People Dear sir, Refer to the rumor in the market that 72% stake of the BCP will be sold to foreign company to take over the company, we would like to inform you as follows. Based on the Cabinet+s resolution in 1995 and the Ministry of Finance+s plan up to now, 31% of BCP stakes; 7% from Ministry of Finance and 24% from Petroleum Authority of Thailand, were endorsed to distribute to Crown Property Bureau, IFCT and public. This will increase the private share from 20% level to 51%. Furthermore, in the next step, parts of the stake should be sold to community organizations as recommended in the Financial and Fiscal for Social Master Plan, which is a pattern of +Sufficient Economy" for a big Thai community. It is also set as a condition in the letter of intent signed with the IMF that BCP should be distributed to the private sector. However, according to the company+s current Article of Association, as proposed by Ministry of Finance, the company have a limit of the portion of foreign partner at not more than 10% in total. Despite 40,000 million baht of revenue, the company share+s price are totally value at only 1,600 million baht due to the stock market down trend. Consequently, selling the company+s stake would contribute only approximately hundred million baht in different compared with selling to foreign and Thai investors. The company agrees with the privatization of 31% stake to the Thai people to maintain its Thai nationality, which will allow the company to make a rapid expansion of the business under Thai trademark, which finally will benefit to the Thai people. Moreover, to remain the Thai company will allow BCP to befriend and close to Thai families so as to promote the Democracy, Constitution, the 8th Economic and Social Development Plan and the liberisation of media focusing on environmental development etc.. In addition this will allow the company to support the contribution to community economy; over 600 communities having members over 1 million people, by being partners in business such as shops, transportation, service station as well as supplying communities+ goods and food to sell at the company+s minimarts. In the long run, the communities are expected to hold more in BCP stakes. Currently in 1998, the company is in the process of expanding numbers of middle-size shop of 400-600 square meters to be the selling point of the countrywide 50-100 community organizations. The business is of strategy to help the poor laid-off workers. Also, the company is working together with the Ministry of Finance and the World Bank+s Social Investment Fund Project to solve the social problem of poverty. Furthermore, the company has also planned to promote to people the +Good Governance", sufficient ecomony and the environmental issues according to the constitution, as well as to initiate the activities to support poor children and families. The company has proved that to contribute to the social whilst expanding the business can be done sucessfully as witness in the company+s revenue which shows the better status among the other same businesses. However, many foreign oil companies including Kuwait Petroleum are trying to take over the company to make use of company+s market to benefit their own company outside the country. In spite of the fact that the Finance Minister, Mr. Tharin Nimmanhemind, had given the direction of the company to work for the Thai rural and the laid-off. But some stock selling representatives and some energy policy management in the government agency have urged to sell the stakes to sole foreign oil company, which is opposed to the idea to distribute to Thai people and community organizations as set in the former plan. The company believes that this issue must be reconsidered, and the company still insists that not more than 20% of the stake should be sold to general foreign investors. The company foresees that, should foreign oil company is allowed to take over the company, this Thai trademark will be given up. And this will not allow the company to run the business together with the Thai people, nor the promotion of democracy, good governance as it has been done throughout the time. The company will have no chance to support Thai rural, the laid-off, while more dollar expenses go out of the country. We expected that the Ministry of Finance will seriously reconsider this privatization in a way to benefit most of the Thai people. In conclusion, the company agrees with the privatization of 31% stake to Thai people as mush as possible and also some portion to general foreign investors in the first stage. Then let the community organizations hold the shares according to the former Cabinet+s resolution and Finance and Fiscal Social Development Master Plan. This will allow the company to remain Thai nationality, expand business under Thai trademark to benefit community organizations and the poor laid-off workers and also support the process to promote the public participation in any benefit issues to be going on. The company views that to sell the BCP stake to allow foreign oil company or Kuwait Petroleum to be the major shareholder is an inappropriate direction concerning the benefit of most of the Thai people. As the 80% of BCP stake which own by government agencies are belong to the Thai people, they should have the right to consider whether BCP should be sold to sole foreign oil company or should be the Thai company to support in the development of the sufficient economy and also to participate in solving the problem of poverty. The result of the people consideration will be the important information for the authority person to consider for the future action. The company itself has no authorization in this matter. Yours sincerely, (Mr.Rabil Pornpatkul) Senior Manager, Corporate Planning Office Corporate Planning Office Tel : 301-2842