Bangkok Expressway and Metro : Information Memorandum Concerning the Acquisition of Assets from the Entering into the Public-Private Partnership Contract for the MRT Orange Line Project Download

Information Memorandum Concerning the Acquisition of Assets from the Entering into the Public-

Private Partnership Contract for the MRT Orange Line Project: Bang Khun Non - Min Buri

(Suwinthawong) Section with the Mass Rapid Transit Authority of Thailand

and

Information Memorandum Concerning the Connected Transaction for the Engagement of

CH. Karnchang Public Company Limited for the Management and Construction of Civil Works (West Section) and the Design, Procurement, Installation, Testing of System Equipment and the

Trial Run (East Section and West Section) of the MRT Orange Line Project: Bang Khun Non - Min

Buri (Suwinthawong) Section

By

Bangkok Expressway and Metro Public Company Limited

11 November 2565

The Transaction Concerning the Acquisition of Assets from the Entering into the Public-Private

Partnership Contract for the MRT Orange Line Project: Bang Khun Non - Min Buri

(Suwinthawong) Section with the Mass Rapid Transit Authority of Thailand

and

The Transaction Concerning the Connected Transaction for the engagement of CH. Karnchang Public Company Limited for the Management and Construction of Civil Works (West Section) and the Design, Procurement, Installation, Testing of System Equipment and the Trial Run (East Section and West Section) of the MRT Orange Line Project: Bang Khun Non - Min Buri (Suwinthawong) Section

The Board of Directors' Meeting of Bangkok Expressway and Metro Public Company Limited (the "Company") No. 5/2022 held on October 17, 2022 has resolved and approved to propose the Extraordinary General Meeting of Shareholders No. 1/2022, which will be held on November 28, 2022, to consider and approve the following matters:

1.

The entering into the Public-Private Partnership Contract ("PPP Contract") for the MRT Orange Line Project: Bang Khun Non - Min Buri (Suwinthawong) Section ("MRT Orange Line Project") with the Mass Rapid Transit Authority of Thailand ("MRTA"), of which the scope of work can be divided into 2 phases: (1) the design and construction of civil works and procurement of mechanical & electrical systems ("M&E systems"), and (2) the operation and maintenance services, with an investment value of Baht 139,127 million (VAT inclusive). The entering into such contract is considered as an asset acquisition pursuant to the Notification of the Capital Market Supervisory Board No. TorChor. 20/2551 Re: Rules on Entering into Material Transactions Deemed as Acquisition or Disposal of Assets dated August 31, 2008 (and its amendments) and the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition and Disposition of Assets, 2004 dated October 29, 2004 (as its amendments) (the "Notifications on Acquisition or Disposition of Assets").

The entering into such transaction has a size of the transaction equals to 120.48% of the Company's total assets (as of June 30, 2022, the Company had total assets of Baht 115,474 million) based on the total value of consideration criteria. During the past 6 months, the Company has no other asset acquisition transaction. Therefore, such transactions are considered as Class 4 transaction pursuant to the Notifications on Acquisition or Disposition of Assets or a backdoor listing in the Stock Exchangeof Thailand ("SET"). However, the entering into this PPP Contract is not considered as the case of the relisting application with the SET because the entering into such transaction is in accordance with the exemptions under Clause 24 of the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition and Disposition of Assets, 2004 dated October 29, 2004 (as its amendments). However, the Company is still obliged to:

• 1. Prepare and immediately disclose the Information Memorandum concerning the entering into the transaction to the Stock Exchange of Thailand ("SET") with at least the information in accordance with the Notifications on Acquisition or Disposition of Assets.

• 2. Arrange a shareholders' meeting of the Company to approve the transaction by sending the notice of the shareholders' meeting to the shareholders at least 14 days prior to the date of the shareholders' meeting. The transaction must receive the affirmative votes of at least three-fourths of the total votes of the shareholders who attend the meeting and are eligible to vote, excluding shareholders with conflict of interests.

• 3. Appoint an independent financial advisor to provide opinions on the transaction by submitting the independent financial advisor's opinion report to the shareholders for consideration along with the notice of the shareholders' meeting. In this regard, the Company has appointed Capital Advantage Company Limited, a financial advisor approved by the Securities and Exchange Commission (the "SEC"), as an independent financial advisor.

2.

The engagement of CH. Karnchang Public Company Limited ("CK") for the management and construction of civil works of the MRT Orange Line Project (West Section) with remuneration of Baht 82,502 million (VAT exclusive) and the design, procurement, installation, testing of system equipment, and trial run of the MRT Orange Line Project (East Section and West Section) with remuneration of Baht 26,714 million (VAT exclusive). The entering into the transaction with CK, who is the company's major shareholder, is considered as a connected transaction in accordance with the Notification of the Capital Market Supervisory Board No. TorChor. 21/2551 Re: Rules on Connected Transactions dated August 31, 2008 (and its amendments) and the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Connected Transactions, 2003 dated November 19, 2003 (and its amendments) (the "Notifications on Connected Transaction").

The engagement of CK in accordance with the aforementioned scope of work is considered as a connected transaction that is a normal business transaction without general trading conditions. Tocalculate size of the connected transaction, the Company has assessed the total value consideration from (1) value of civil design and construction works and (2) value of M&E systems procurement, which is in accordance with the employment contract between the Company and CK and is consistent with the Company's proposal submitted to the MRTA. The total value of transaction is at Baht 109,216 million, equivalent to 289.02% of net tangible asset based on consolidated financial statements as of June 30, 2022 (Baht 37,788 million x 3% = Baht 1,134 million).

In the past 6 months prior to the date on which the Board of Directors resolved to propose the Extraordinary General Meeting of Shareholders No. 1/2022 to consider and approve the entering into the employment contract with CK for the management and construction of civil works, design, procurement, installation, testing of system equipment, and trial run of the MRT Orange Line Project, the Board of Directors resolved on July 8, 2022, for the Company to enter into the connected transaction concerning the maintenance and structural improvement and system works of the Si Rat Expressway, the Si Rat - Outer Ring Road Expressway and the Udon Ratthaya Expressway with the size of the connected transaction of 2.82% of net tangible assets. Therefore, the total size of the connected transaction is 291.84%, which is higher than 3% of net tangible asset. In this regard, the Company is required to act as follows:

• 1. Prepare and immediately disclose the Information Memorandum concerning the entering into the transaction to the Stock Exchange of Thailand ("SET") with at least the information in accordance with the Notifications on Connected Transaction.

• 2. Arrange a shareholders' meeting of the Company to approve the transaction by sending the notice of the shareholders' meeting to the shareholders at least 14 days prior to the date of the shareholders' meeting. The transaction must receive the affirmative votes of at least three-fourths of the total votes of the shareholders who attend the meeting and are eligible to vote, excluding shareholders with conflict of interests.

• 3. Appoint an independent financial advisor to provide opinions on the transaction by submitting the independent financial advisor's opinion report to the shareholders for consideration along with the notice of the shareholders' meeting. In this regard, the Company has appointed Capital Advantage Company Limited, a financial advisor approved by the SEC, as an independent financial advisor.

To proceed for the shareholders' meeting of the Company in relation to aforementioned matters pursuant to the Notifications on Acquisition or Disposition of Assets and the Notifications on Connected Transaction, the Company would like to notice the information memorandum of the 2 matters to the shareholders as follows:

Part 1

Information Memorandum Concerning the Acquisition of Assets from the Entering into the Public-

Private Partnership Contract for the MRT Orange Line Project: Bang Khun Non - Min Buri

(Suwinthawong) Section with the Mass Rapid Transit Authority of Thailand

• 1. Date of the Transaction

  The Company shall enter into the PPP Contract for the MRT Orange Line Project with the Mass Rapid Transit Authority of Thailand ("MRTA") after the Company receive the approval from the shareholders' meeting and the Cabinet approved the MRTA to enter into the contract.

• 2. Contract Parties and Relationship with the Company

  Grantor : Mass Rapid Transit Authority of Thailand ("MRTA")

  Concessionaire : Bangkok Expressway and Metro Public Company Limited (the "Company")

  Relationship with the Company :

  The MRTA is the shareholder of the Company. As of the Company's latest closing date of shareholders' register on October 31, 2022, the MRTA held 1,256,259,584 shares or 8.22% of the Company's paid-up capital. The MRTA has 2 representatives who serves as directors of the Company, namely Mr. Piyakorn Apibalsri (director of the MRTA) and Mr. Vithaya Punmongkol (Deputy Governor (Operations) of the MRTA).

  However, the MRTA is not considered as a connected person of the Company pursuant to the Notification of the Capital Market Supervisory Board No. TorChor. 21/2551 Re: Rules on Connected Transactions dated August 31, 2008 (and its amendments) and the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Connected Transactions, 2003 dated November 19, 2003 (and its amendments) (the "Notifications on Connected Transaction").

  At the Board of Directors' Meeting No. 5/2022 held on October 17, 2022, Mr. Piyakorn Apibalsri and Mr. Vithaya Punmongkol, the directors representing the MRTA, did not attend the meeting and did not vote on the agenda concerning the entering into the PPP Contract for the MRT Orange Line Project.

3.

General Characteristics of the Transaction

The Company intends to participate in the Public-Private Partnership for the MRT Orange Line Project, of which the scope of work is divided into 2 phases: (1) the design and construction of civil works and the procurement of M&E systems, and (2) the operations and maintenance services.

The entering into the PPP Contract is considered as the acquisition of assets pursuant to the Notifications on Acquisition or Disposition of Assets. In calculating the size of the asset acquisition transaction, the Company referred to the total value of the considerations of the MRT Orange Line Project of Baht 139,127 million (VAT inclusive), comprising of (1) value of the design and construction of civil works and interest during construction of Baht 95,432 million and (2) value of the procurement of M&E systems and related expenses for the right to operate the MRT services of Bath 43,695 million which is in accordance with the Company's proposal submitted to the MRTA. The details of the transaction size calculation, based on consolidated financial statements as of June 30, 2022, are as follows:

Criteria for Calculation of

Calculation Formula

Transaction Size

• 1. Net tangible asset (NTA) criteria

  • = Not applicable as it is an acquisition of assets other than securities.

• 2. Net profit criteria

  • = Not applicable as it is an acquisition of assets other than securities.

• 3. Total value of consideration criteria

• = The investment value of the project, which is in accordance with the Company's proposal submitted to the MRTA / Total assets according to the Company's consolidated financial statements

• = Baht 139,127 million / Baht 115,474 million

• = 120.48%

  4. Total value of securities criteria

• = Not applicable because there is no issuance of new securities as consideration of assets acquired

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Size of the transaction is equal to 120.48% of the Company's total assets (as of June 30, 2022, the Company had total assets of Baht 115,474 million) based on the total value of consideration criteria. During the past 6 months, the Company has no other asset acquisition transaction. Therefore, such transactions are considered as Class 4 transaction pursuant to the Notifications on Acquisition or Disposition of Assets or a backdoor listing in the Stock Exchange of Thailand ("SET"). However, the entering into this PPP Contract is not considered as the case of the relisting application with the SET because:

• (1) The acquired business is in a similar line of business or a mutually supporting business to the listed companies

  Currently, the Company operates as a concessionaire from the public sector, including concessions for expressway and the MRT projects as well as commercial development on such concessions. The entering into the PPP Contract for the MRT Orange Line Project is the acquisition of a project that is the Company's normal business. In addition, the partnership in the MRT Orange Line Project shall promotes the Company's overall business. As a result, the Company shall be able to provide a more comprehensive service and create opportunities to increase the number of passengers of the current MRT projects.

• (2) The listed company has no policy to make a significant change in its core business after the acquisition

  The Company has no policy to make a significant change in its core business.

• (3) The group of listed companies resulting from the acquisition of assets has suitable qualifications for listing with the SET

  After entering into the PPP Contract for the MRT Orange Line Project, the Company is still able to comply with the criteria for maintaining the status of a listed company of the SET since the acquisition of the MRT project is the Company's core business operation. The Company shall apply the same principal of the internal control for operation of the MRT Orange Line Project.

• (4) There will be no material change in the composition of the Board of Directors of the listed company or in the controlling power of the listed company or the controlling shareholders of the listed company

  The Company has no plans to make significant change to its Board of Directors. In addition, after the entering into the PPP Contract for the MRT Orange Line Project, CH. Karnchang Public Company Limited will remain the major shareholder of the Company.

Thus, the entering into such transaction is in accordance with the exemptions under Clause 24 of the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition and Disposition of Assets, 2004 dated October 29, 2004 (as its amendments). However, the Company is still obliged to (1) disclose the information memorandum of such transaction to the SET, (2) seek for approval from the shareholders' meeting with the affirmative vote of at least three-fourths of the total votes of the shareholders who attend the meeting and are eligible to vote, excluding shareholders with conflict of interests, and (3) send the notice of the shareholders' meeting with the opinion of the independent financial advisor to the shareholders for a period not less than 14 days prior to the date of the shareholders' meeting.

4.

Details of the Acquired Asset

The asset being acquired is the PPP Contract for the MRT Orange Line Project: Bang Khun Non - Min Buri (Suwinthawong) Section. The project connects East Bangkok and West Bangkok with the total distance of 35.9 kilometers. There are 28 stations, divided into 2 phases as follows:

• 1. The MRT Orange Line Project (East Section)

  Total distance of 22.5 kilometers with 17 stations from Thailand Cultural Centre Station to Suwinthawong Station, comprising of 10 underground stations and 7 elevated stations

• 2. The MRT Orange Line Project (West Section)

  Total distance of 13.4 kilometers with 11 stations from Bang Khun Non Station to Thailand Cultural Centre Station, all of which are underground stations

The material terms of the PPP Contract between the Company and the MRTA can be summarized as follows:

4.1 General Characteristics of the Contract

The PPP Contract for the MRT Orange Line Project: Bang Khun Non - Min Buri (Suwinthawong) Section is in a PPP net cost arrangement or the partnership between the public and private sectors. The public sector shall responsible for cost of civil works of the MRT Orange Line Project (East Section) and land acquisition cost of the MRT Orange Line Project (West Section) while the private sector invests in civil works of the MRT Orange Line Project (West Section) and the M&E systems cost, rolling stocks, as well as system operation and maintenance of the entire route for a period of 30 years starting from the commencement dateof the commercial operation of the MRT Orange Line Project (East Section). In this regard, the public sector shall subsidize for the civil works of the MRT Orange Line Project (West Section). The private sector has the right to revenue from fares and commercial development rights while paying concession fee to the public sector in accordance with the conditions specified in the PPP Contract. The MRT Orange Line Project: Bang Khun Non - Min Buri (Suwinthawong) Section connects East Bangkok and West Bangkok with a total distance of 35.9 kilometers, divided into 22.5 kilometers of the East Section (Thailand Cultural Centre - Min Buri (Suwinthawong) with 17 stations (10 underground stations and 7 elevated stations) and 13.4 kilometers of the West Section (Bang Khun Non - Thailand Cultural Centre) with 11 underground stations.

4.2 Term of the Contract

The contract period is 33 years and 6 months, divided into 2 phases as follows:

Phase 1: Civil design and construction and procurement of M&E systems

• 1. The MRT Orange Line Project (East Section): 3 years and 6 months from the date specified on the Notice to Proceed of the MRTA

• 2. The MRT Orange Line Project (West Section): 6 years from the date specified on the Notice to Proceed of the MRTA

Phase 2: The operation and maintenance service: 30 years from the commencement date of the commercial operation of the MRT Orange Line Project (East Section)

4.3

Scope of Work

Duties and responsibilities of the Company

Phase 1: The design and construction of civil works and procurement of M&E systems

1.

The MRT Orange Line Project (East Section): The Company's duties and responsibilities comprise of the design, manufacturing, procurement, and installation of M&E systems, and other related systems and computer programs for the management of the project, as well as individual testing, integrated system testing and trial run, training, and technology transfer for the readiness of public services under the terms and conditions specified by the MRTA under the PPP Contract.

2.

The MRT Orange Line Project (West Section): The Company's duties and responsibilities comprise of the design and construction of civil works, facilities, including buildings, demolitions and/or reconstruction of utilities related to the project as specified in the contract, as well as the design, manufacturing, procurement, and installation of the M&E systems and other related systems and computer programs for the management of the project, as well as individual testing, integrated system testing and trial run, training, and technology transfer for the readiness of public services under the terms and conditions specified by the MRTA under the PPP Contract.

Phase 2: Operation and maintenance services (East Section and West Section)

• 1. Operation: The Company's duties and responsibilities comprise of the operational management and provision of the safe and efficient MRT service in accordance with the standards specified in the PPP Contract. It must also provide adequately skilled personnel and security and rescue, maintenance, inspection of service, and insurance in accordance with the requirements of the MRTA.

• 2. Maintenance: The Company's duties and responsibilities comprise of the inspection and maintenance of civil works, except for park & ride buildings, and the maintenance, repair, refurbishment and replacement (as necessary) for the M&E systems, including all maintenance equipment and tools of the MRT Orange Line Project provided by the Company and which have been granted the right of possession by the MRTA.

• 4.4 Source of Funds

  The Company shall be responsible for the costs and necessary funding for the works, including expenses and compliance with the terms and conditions of the contract.

• 4.5 Ownership of System Equipment

  The Company is responsible for transferring ownership of the M&E systems, which are assets that the Company has constructed or procured under the contract, to the MRTA after passing all the tests required under the contract and the MRTA has issued the commissioning certificate to the Company. The MRTA shall assign the right to control and possess of such assets, including the civil works of the

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