Capital increase in ordinary shares

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1.  Specified Objectives
   Determine objectives for the use of capital (funding plan), plus clearly stating the number of additional and allocated shares.
2. General Mandate
   - Shareholders approve allocation frameworks (i.e. types and number of shares), but not yet known the objective and other details.
   - Shareholders give a mandate to the Board of Directors (BOD) considering capital increase and allocation. Every allocation must be disclosed in details.

1. Right offering to all existing shareholders (Right Offering : RO)
2. Right offering proportionately to all existing shareholders excluding shareholders whose holding of such share would cause the company to be under the obligations of any international laws. (Preferential Public Offering : PPO)
3. Public offering (PO)
4. Private placement* (PP)

*PP is an offering to no more than 50 persons, or not over THB 20 million within 12 months, or offering to institutional investors.

• The listed company must notify its BOD resolution on capital increase via SETLink system with related information as well as the Capital Increase Report Form (F53-4 form). The information must be submitted immediately on the day the board has made the resolution, or by 9.00 a.m. of the following business day as the latest
• Material information to be included in the BOD’s resolution as follows.
  1. Details of the allocation such as number of additional shares, types of investors, offering price and market price, and type of allocation.
  2. The objectives of share issuance and its timeframe.
  • Separately specify in details of the objectives, budgets, and timeframes of each objective.
  • In case the company raises the fund for its project, it has to briefly describe details of the project, expected return, impacts to the company if it fails to complete the project, risks, primary budgets and expected total budgets.
  3. Effects to company’s shareholders after capital increase including EPS dilution, control dilution, and worthiness of shareholders.
  4. Board of Directors’ opinions towards reasons and necessity of the capital increase, plan of the projects, sufficiency of the funds, impacts to company’s financial stability and its operation.
  5. Shareholder’s meeting date, Record Date (RD) or Book-closing Date (BC) for meeting entitlement

In case of RO and PPO,

• Specify the exercise ratio, record date (RD) or Book-closing Date (BC)
• - The listed company must deliver the capital increase information and subscription right forms no less than five business days prior to the subscription date. And
• Allow no less than five business days for the subscription and payment.

(PP and PO) : SEC approval is required. The listed company must submit of the prospectus to the SEC in advance for ≥ 3 business days prior to the subscription and payment dates)

Additional disclosure information required for PP allocation

The listed company must disclose information via SETLink system as follows.

• Details of PP such as names and backgrounds.
• The BOD and audit committee’s opinions regarding its rationale of offering price, reasons and necessity of allocation to PP and the BOD’s statement of certification proving their consideration and verification on PP investors’ information.
• PP at a price below 90% of the market price (Discounted Price): a company must specify the shareholders’ right to protest such allocation with the BOD’s opinion on worthiness of investors comparing to the discounted price by considering the effects of expenses and company’s financial positions according to the accounting standard of share-based payments.
• Conditions/ other agreements of PP such as holding period, silent period, including the case that PP’s shares may be prohibited to sell in specified period (Silent Period) (Please see details of silent period for PP allocation at discounted price).

• The company must request for SEC approval, which falls under 4 cases depending on allocation and offering price.
  
  Case 1: BOD is delegated to offer at the market price
  Case 2: Specified price is voted by the shareholders
  Case 3: Allocation of remaining shares after proportionate allocation to the shareholders
  Case 4: PP allocation other than Case 1-3

1. Features of the offerings
1. Amount of share offering
2. Allocation
3. Offering Price and the Market Price calculations
4. Offering and Allocation methods
2. Objectives on PP Allocation
1. Clear objectives on the offerings
2. Funding plan
3. Details of projects
3. Impacts on shareholders
1. Price Dilution
2. EPS Dilution or Control Dilution
3. Worthiness of investors considering the dilutions.
4. Board of Directors’ opinions
1. Reasons and necessity of the capital increase
2. Possibility of funding plan
3. Rationale of capital increase, funding plan, and the project, and the fund sufficiency if the capital increase does not meet expectation.
4. Impacts on company’s business, financial stability and its operation from the capital increase and funding plan.
5. Other information (if any)
5. Statements specify shareholders’ right to demand compensation if BOD fails to do its duty with sincere and protect company’s benefits.
6. In case specified price is voted by shareholders, additional information (besides 1-5) is required accordingly;
1. Names of subscribers
2. Board of Director’s opinion on
   •  Pricing of issued shares
   •  Offering Price calculation
   •  Reasons and necessities of the offering
3. The commitment of BOD showing it carefully considers and audits the subscribers to ensure their potential on investment.
7. In case specified price is voted by shareholders at the Discounted Price or PP allocation after RO at the price below fully diluted, must follow additional requirements accordingly;
1. Must not have ≥10% veto of shareholder votes
2. BOD’s opinion on
   • The subscriber’s business or expertise that whether it be synergized to the company
   • The worthiness of investors considering share-based payments

*Offering new shares at a Discounted Price refers to the sale of additional issued shares lower than 90% of the Market Price.

*Market Price as PO approval rules  should be based on one of the following prices:

1. Weighted Average Price (intraday average price or closing price) of at least the past 7-15 consecutive business days, prior to the price at setting date. The date for price setting will be according to the board’s resolution, which could be one of the followings:
• The day that BOD resolved
• The day the shareholders have voted resolution
• The first share offering day for investors
• The day the shareholders can exercise their rights to convert its debentures, or to subscribe shares as per their warrants
2. The price determined by market process such as the book building method
3. A fair price assessed by the Financial Advisor approved by the SEC

Report on the results of capital increase share allocation

Report of the utilization of Capital Increase Fund

The listed company is responsible for reporting the utilization of the capital increase fund every six calendar months, within 30 days, via SETLink:

The company is obligated to report until the fund has been used up. If the fund use is not in line with stated objectives, the company should also clarify the reasons along with the use of fund reporting.

Capital increase shares approved to be listed securities

• After reporting the results of share allocation, the company must registered additional shares with the Department of Business Development, Ministry of Commerce (MOC). The company then receives an affidavit with respect to the Company's registered capital and the receipt for payment of fee.
• Submit a copy of an affidavit with respect to the Company's registered capital to the registrar (Thailand Securities Depository: TSD), so that TSD will either add shares by crediting additional shares into shareholder’s accounts, or issuing share certificates.
• In case the company allocate to PP at the Discounted Price, those PP’s shares must be locked up with TSD (Silent Period) (See more detail on Silent Period for PP Allocation rule).
• Submit the Application for Listing of Securities (F53-6) via Smart Listing, SETLink within 30 days after the subscription or the conversion has ended.

The PP’s additional shares that have subscribed or converted at the Discount Price must be locked up  

• PP that are subjected to Silent Period: The investors that subscribe additional shares or convert securities at the price ≥ 90% below the Market Price.
• The price below 90% of the Market price: Calculate in accordance to SEC regulation;
• Shares from additional shares subscription: use offering price
• Shares from debenture conversion: use CD offering price divided by conversion ratio
• Share from warrant exercise: use warrant offering price adds exercise price
• Share from additional shares issued along with warrant calculated by

((Ps) (Qs)) + ((Pw)(Qw))+ ((Ep)(Qx))
Qs +  Qx

Where;
Ps = Offering Price
Qs = Quantity of shares offering with additional warrants
Pw = Warrants offering price
Qw = Quantity of warrants offering with additional shares
Ep = Warrants exercise price
Qx = Quantity of shares after exercise Qw

If the company issues additional shares along with convertible securities, it must calculate offering price using share offering price or offering price of issued additional shares along with convertible securities (whichever is lower).

• The Market Price:
• Weighted Average Price (intraday average price or closing price) of at the past 7-15 consecutive days, prior to the price at subscription date or converted date.
• If there is no market price, use fair price assessed by the Financial Advisor approved by the SEC
• Quantity of locked up shares: All shares allocated to PP at the Discounted Price. Also, the additional shares from securities conversion.
• Silent Period: 1 year from additional shares’ first trading date. After 6 months, the shareholders can sell up to 25% of the locked up stocks.
• For convertible security offerings, silent period will be 1 year from the day that investors own those securities.
• Exemption:  PP allocated after RO at the price above the Discounted Price (only when the company allows RO to oversubscribe)
• Allowance: SET may soften the criteria for certain investors of the certain categories such as
• Creditors who are allocated shares or convertible securities as a result of debt restructuring by the use of newly issued shares as debt repayment.
• Institutional investors, except private fund, etc.