Ref: COR:MS/EL06017e/ms
19 October 2006
Subject: Investment in a New Subsidiary Company
To: The President of the Stock Exchange of Thailand
Pursuant to the Board of Directors meeting held on 19 October 2006 at 2.00 P.M., Thoresen Thai Agencies Public Company Limited ("TTA") has approved an investment in a new subsidiary company. Details of this investment are as follows:
| 1. Date of Transaction | Date of incorporation - End of October 2006 | |
| 2. Name of the New Subsidiary Company | GAC Thoresen Logistics Ltd. ("GACTL") | |
| 3. Country of Incorporation | Thailand | |
| 4. Type of Business | Logistics business | |
| 5. Registered and Paid-up Capital | GACTL's registered capital shall be Baht 75 million (Baht Seventy Five Million) divided into 750,000 ordinary shares with a par value of Baht 100 (Baht One Hundred). Upon establishment, only 50% of the registered share capital, or Baht 37.50 million (Baht Thirty Seven Million Five Hundred Thousand) will be called. Once construction on the project begins, the remaining 50% will be called. | |
| 6. Major Shareholders | TTA |
holds 51% |
|
Gulf Agency Company Limited, Liechtenstein ("GACL") |
holds 29% | |
| Mr. Lars Safverstrom ("LS") (LS is the GAC Group's chief executive officer) |
holds 20% | |
| Total |
100% | |
| 7. Source of Funds |
From the working capital of TTA | |
| 8. Rationale |
TTA owns 51% of Gulf Agency Company (Thailand) Ltd. ("GACT"), which was established in 1992. It operates in both ship agency and logistics businesses. GACT is also part of the GAC Group, which employs more than 6,500 people in over 200 offices around the world. The GAC Group is a fully integrated service provider to the shipping, marine, and logistics markets. In terms of logistics, the GAC Group offers a full range of services from air and marine freight forwarding to ground based storage and distribution. Since the logistics business has good growth potential, the GAC Group would like to expand in Thailand to own and operate a warehouse and offer full-scale logistics services. GACL, the holding company of the GAC Group, approached TTA to establish a new joint venture company to penetrate the domestic logistics market. Initially, GACTL will build a 10,000 square meter warehouse on approximately 18 rais of land in Amata Nakorn Industrial Estate, Bangpakong, Cholburi province. The investment in GACTL is linked to TTA's strategic decision to increase the scale of our non-dry bulk shipping operations. | |
| 9. Total Value of Consideration |
The total investment of Baht 38.25 million (Baht Thirty Eight Million and Two Hundred Fifty Thousand) equates to a 51% stake in GACTL when the registered capital is fully paid-up. The transaction equals 0.36% of the net tangible assets of TTA and its subsidiaries after deducting the minority interests as of 30 June 2006 (the net tangible assets of TTA and its subsidiaries after deducting the minority interests as of 30 June 2006 amounted to Baht 10,363,164,800). When this transaction is included with other asset acquisition transactions in the past six months, it is not subject to the Rules, Procedures and Disclosure of Information of the Stock Exchange of Thailand regarding the Connected Transactions or the Acquisition and Disposition of Assets of Listed Companies. | |
Thoresen Thai Agencies Public Company Limited Ref. No. COR:MS/EL06017e/ms
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Thoresen Thai Agencies Public Company Limited Ref. No. COR:MS/EL06017e/ms
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Yours faithfully,
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M.R. Chandram S. Chandratat M.L. Chandchutha Chandratat
Chairman Managing Director
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