03 Apr 2015 19:32:00
The Notification of the Decision to Refrain from Exercising of the Rights to Invest
Jortor 11-580192 April 3, 2015 To: The President The Stock Exchange of Thailand Re: The Notification of the Decision to Refrain from Exercising of the Rights to Invest in Ibis Huahin and/or Ibis Kata that were offered by the Erawan Group Public Company Limited SCB Asset Management Co., Ltd., the Management Company ("the Management Company") of Erawan Hotel Growth Property Fund ("the Fund") would like to notify that it has decided to refrain from exercising the Rights to Invest in Ibis Huahin and/or Ibis Kata that were offered by the Erawan Group Public Company Limited ("ERAWAN") as summarized below: Due to ERAWAN offered the sale of Ibis Huahin and/or Ibis Kata ("the Offering Properties") to the Fund, in accordance with the Undertaking Agreement between ERAWAN and the Fund dated on March 27, 2013 ("the Undertaking Agreement"). According to the term that was specified in the Undertaking Agreement, the Fund needs to get an approval from the Unitholders within 60 days from the date that the Fund received an offering letter from ERAWAN, which was on February 20, 2015. However, section 58 of the Announcement of the Office of the Securities and Exchange Commission (the "Office of the SEC") No. SorNor. 25/2556 re: Rules, Conditions and Procedure of the Establishment and Management of Property Fund, amended by the Announcement of the Office of the SEC No. SorNor. 40/2556 re: Rules, Conditions and Procedure of the Establishment and Management of Property Fund (9th edition) requires that the Management Company must submit the filing to the Office of the SEC to seek an approval of the capital increase in order to make additional investment in real properties or leasehold rights to real properties within December 31, 2013. Given this requirement, the only way for the Fund to invest in the Offering Properties is to get an approval from the Unitholders to convert itself from Property Fund into Real Estate Investment Trust ("REIT") before making an investment in the Offering Properties. In addition, the Fund also needs to act in accordance with the Announcement of the Capital Market Supervisory Board No. TorChor. 50/2556 re: the Conversion of Property Fund into Real Estate Investment Trust ("Announcement TorChor. 50/2556"). The involved processes that the Fund needs to follow in order to make an additional investment according to related announcements/guidelines shall take longer than 60 days. Due to the timing limitations explained above, the Management Company already put its best efforts to protect the highest interest of the Unitholders by negotiating and sending the letter to ERAWAN to request for the extension of the exercising period to give the Fund sufficient time to take necessary actions to properly make an additional investment in such Offering Properties. Such actions include the arrangement for an approval from the Unitholders re: conversion into REIT and the capital Increase and the arrangement for an approval from the Office of the SEC, and etc. However, ERAWAN had considered the request and given a response to the Management Company that the timeframe specified in the Undertaking Agreement might be for the highest interest to ERAWAN's shareholders in terms of the return from selling the Offering Properties that ERAWAN's shareholders shall receive and the mitigation of the risk arisen from the market volatility which is an external factor uncontrolled by ERAWAN. In addition, the extended exercising period requested by the Fund is substantially longer than the period previously agreed in the Undertaking Agreement. For these reasons, ERAWAN denied the request for the extension of exercising period by the Management Company. Thus, the Fund needs to refrain from exercising the Rights to Invest in Ibis Huahin and/or Ibis Kata that were offered by ERAWAN. However, the Fund's Rights to Invest in any Ibis hotels owned by ERAWAN that are located in Thailand shall continue under the Undertaking Agreement until March 31, 2018 as the Fund has such right for 5 years from the date that ERAWAN registered the ownership transfer of Ibis Patong and/or Ibis Pattaya to the Fund. Under the Undertaking Agreement, ERAWAN cannot enter into a transaction with any parties in the same or better terms and conditions compared to those that ERAWAN offered to the Fund for the Offering Properties within 150 days after the date that the Fund denies to exercise its Right to Invest or the date that the Fund is unable to enter into such transaction. Such no-better-offer period will end on July 19, 2015. Please be informed accordingly. Yours faithfully, Erawan Hotel Growth Property Fund By SCB Asset Management Company Limited (Mrs. Tipaphan Puttarawigorm) Senior Vice President, Property and Infrastructure Investment Group ______________________________________________________________________ This announcement was prepared and disseminated by listed company or issuer through the electronic system which is provided for the purpose of dissemination of the information and related documents of listed company or issuer to the Stock Exchange of Thailand only. The Stock Exchange of Thailand has no responsibility for the correctness and completeness of any statements, figures, reports or opinions contained in this announcement, and has no liability for any losses and damages in any cases. In case you have any inquiries or clarification regarding this announcement, please directly contact listed company or issuer who made this announcement.