Bangkok, March 20, 2015 ? The SEC urges shareholders of EMC Plc. (EMC) to study information and exercise voting rights, at the upcoming EMC shareholders? meeting on March 25, 2015. EMC proposed to the shareholders? meeting to enter into related party transaction with Ua Withya Plc (UWC) to purchase shares of Imperial Land Company Limited (IMP) and the claim over outstanding loan and accrued interests.

Earlier, EMC announced the proposed acquisition of 100% IMP shares from UWC at the price not exceeding 134.80 million baht and purchase of the claim over outstanding loan and accrued interests for the price not exceeding 144 million baht, totaling the payment up to 278.80 million baht for the purpose of acquiring ?Station 1 @ China Town Project? (Station 1 Project). In order to continue Station 1 Project commercial operation, furthermore, EMC must make the payment up to 163 million baht to acquire the leasehold estate, land and building, from the Office of the Privy Purse, Bureau of the Royal Household and/or Bejaratana-Suvadhana Foundation. In addition, EMC must also return the deposit of the original project in the amount up to 2.9 million baht. Accordingly, the entire investment amount will not exceed 444.70 million baht.  Due to the significance of such transaction in terms of size and involvement with EMC?s major shareholder, the Leenabanchong group, the proposal is therefore classified as related party transaction and asset acquisition subject to the approval of shareholders? meeting.

Although, the transaction value is within the range of 245.24-292.78 million baht as appraised by independent financial advisor (IFA), IFA opined that the proposed transaction is not appropriate. IFA described that EMC may be exposed to the risk to acquire the Station 1 Project at the price that is significantly higher than the minimum price as appraised by IFA if EMC is not able to satisfy the condition precedent. Moreover, the Project is exposed to legal risks on the issues of building modification; uncertainty of lease contract between IMP and the Office of the Privy Purse, Bureau of the Royal Household and/or Bejaratana-Suvadhana Foundation both in terms of expenses and building usage. Other risks associated with the Project include liquidity risk of contractor business and sales would not go ahead as planned due to community opposition in the area nearby Wat Lengnoeiyi, causing delay of the Project. Then EMC business operation may be affected significantly. Besides, even though EMC has included the conditions in the IMP share purchase agreement that EMC will make payment only when the building is open for usage and IMP has signed new contract with the Office of the Privy Purse, Bureau of the Royal Household and/or Bejaratana-Suvadhana Foundation to lease land and building, IFA viewed that the Project remains exposed to legal risk if the ongoing construction is considered as building modification. As such, the Project building could be suspended and/or might be demolished.  In this regard, the EMC Audit Committee agreed with IFA that the transaction is not appropriate.   

Later, EMC sought legal opinion from independent legal advisor. The independent legal advisor?s opinion on legal risk is different from the IFA?s opinion in that such modification is considered as the building repair in accordance with the order of the local authority, by virtue of Section 46 of Building Control Act B.E. 2522 (1979), and the risk associated with changes of lease agreement is low. To mitigate the said risk, the IMP share purchase agreement thus included the conditions that the payment will be made only when the building is open for usage and IMP has signed new contract with the Office of the Privy Purse, Bureau of the Royal Household and/or Bejaratana-Suvadhana Foundation to lease land and building. Accordingly, EMC board of directors approved to propose the transaction to the shareholders? meeting for approval because the said conditions have been included in the agreement and it is reasonable for company business operation. The opinions of audit committee and independent legal advisor have been disclosed for the consideration of shareholders? meeting. 

In this connection, the SEC advises EMC shareholders to carefully study the information, exercise their rights to protect their own benefits, and seek clarification or explanation from the company directors and executives so as to have sufficient information for their decision-making.

The above transaction must be approved by shareholders with at least three fourths of the shareholders attending the meeting and eligible to exercise voting rights; excluding the interested shareholders.