REPORT SUMMARY OF STECON BUSINESS REORGANIZATION PLAN FOR...

Our Ref : ST/2000/0522 December 12, 2000 Subject : Report Summary of STECON Business Reorganization Plan for consideration on SP' Sign lifting Attention : The President The Stock Exchange of Thailand Reference : 1) ST/2000/0507 dated November 22, 2000, Subject: Request for SP' Sign lifting on STECON securities Attachment : Summary of STECON Business Reorganization Plan The Company would like to submit the summary of Business Reorganization Plan to the SET. For your further consideration. Yours sincerely, (Mr. Woraphant Chonthong) Senior Vice President Finance and Account Index Heading Page - Purpose of Reorganization 2 - Restructured debt 2 - Classification of Creditors 3 - Business Reorganization Steps 5 - Debt repayment according to Creditor Class 6 - Plan Approval and Implementation 9 - Report on the progress of Business Reorganization Plan 10 - Next Implementation 10 - No dividend for 5 years 11 - Non-operation of STC 11 - Liquidity Requirement 1 Summary of STECON Business Reorganization Plan Purpose of Reorganization 1. To restructure and reduce STECON's debt so that STECON's income generation level is sufficiently viable, enabling STECON to repay its debt. 2. To distribute the methods of STECON's debt repayment to STECON's Creditors, e.g., the transfer of STECON's Non-Core Assets or its debt-equity conversion, and to fairly implement the said distribution in the order as required by the law. 3. To ensure that all creditors receive debt repayment from STECON in an amount exceeding that which they would have received if the court were to currently declare STECON to be bankrupt. 4. To rehabilitate STECON's business viability. 5. To release STECON from insolvency (i.e., so that STECON will have positive shareholders' equity). Restructured Debt (total 5,073.2 million Baht) comprised of:- Financial creditors - Principal 4,260.7 million THB - Accrued interest 644.0 million THB - Withholding tax 7.6 million THB - Bank guarantee fee 1.9 million THB Commercial creditors and others - Principal 139.7 million THB - Accrued interest 19.3 million THB CLASSIFICATION OF CREDITORS The 75 Creditors can be classified into 8 groups pursuant to identical or similar claims or interests in material aspects according to the conditions set forth in Section 90/42 bis of the Bankruptcy Act as follows: Class 1 Financial Creditors Financial Creditors mean creditors who entered into facility agreements, overdraft agreements, bills of exchange, promissory notes, checks and other forms of credit facility agreements with STECON, Beneficiary Creditors of a guarantee issued by STECON who have demanded STECON to pay for such guaranteed debt, including creditors whose claims are assigned from the Financial Creditors. Total debt for Class 1 Creditors: Baht 4,656,310,763.45 Class 2 Working Capital Creditors Working Capital Creditors mean creditors who provide working capital facility support to STECON under current overdraft agreements. Total debt for Class 2 Creditors: Baht 55,000,298.17 Class 3 Foreign Currency Swap Creditors Foreign Currency Swap Creditors mean creditors who entered into Foreign Currency Swap Agreements with STECON, including those creditors whose claims are assigned from the Foreign Currency Swap Creditors. Total debt for Class 3 Creditors: Baht 201,168,154.91 Class 4 Sub-Contractor Creditors Sub-Contractor Creditors mean creditors who entered into Hire of Work Agreements and/or Order Forms and Lease of Movable Property Agreements with STECON. Total debt for Class 4 Creditors: Baht 31,889,059.35 Class 5 Trade Creditors Trade Creditors mean creditors who entered into Sale and Purchase Agreements and/or Order Forms for Equipment and Raw Material with STECON. Total debt for Class 5 Creditors: Baht 81,894,337.26 Class 6 Creditors Whose Claims Are Disputed by STECON Creditors Whose Claims Are Disputed by STECON mean creditors whose applications for repayment filed to the OR have been disputed by STECON, and no order with respect to such applications has been granted from the OR as of July 21, 2000. Total debt for Class 6 Creditors: Baht 41,035,792.37 Class 7 Condominium Creditors and Facility Agents Creditors under the Syndicated Loan Condominium Creditors mean creditors who entered into the Condominium Unit Sale and Purchase Agreement with STECON, and Facility Agent Creditors mean creditors who are agents for creditors under the Syndicated Loan and are entitled to claim their operating fees from STECON. Total debt for Class 7 Creditors: 4,200,611.62 Class 8 Bond Issuer Creditors and Beneficiary Creditors Bond Issuer Creditors and Beneficiary Creditors mean the creditors who issue the Letter of Guarantee for STECON's obligations to its contractual parties, the Beneficiary Creditors who have not yet demanded for payment under the guaranteed debt, and the creditors who have accrued and outstanding fees under the Letter of Guarantee prior to the Appointment Date. Total debt for Class 8 Creditors: Baht 1,730,320.29 Total debt (8 Classes): Baht 5,073,229,337.43 Business Reorganization Steps a) The increase of registered capital Within 60 days from the date of Plan approval, STECON will increase its registered capital and issue 55,000,000 ordinary shares. These shares will be divided into (i) Group 1 Shares consisting of 5,000,000 newly issued shares with the par value of Baht 10 per share, offered for sale to the Majority Shareholder at the price of Baht 20 per share, and (ii) Group 2 Shares consisting of 50,000,000 newly issued shares with the par value of Baht 10 per share, offered for sale to Class 1 and Class 3 Creditors at the price of Baht 70 per share. b) The purchase of newly issued shares by the Majority Shareholder Within 60 days from the date of Plan approval, the Majority Shareholder will purchase Group 1 Shares as per clause 7.2 a) (with a par value of Baht 10 each) at the price of Baht 20 per share. c) The debt-equity conversion of the Financial Creditors Within 60 days from the date of Plan approval, Class 1 and Class 3 Creditors will convert the Baht 3,500,000,000 principal into Group 2 Shares as per clause 7.2 a) (with a par value of Baht 10 each) at the price of Baht 70 per share, proportionate to the Outstanding Principal due to each Creditor. d) The transfer of Non-Core Assets to the Asset Management Company ("AMC") Within 60 days from the date of Plan approval, STECON will transfer its Non-Core Assets to AMC to repay its Baht 5,516,966.17 Outstanding Principal proportionate to that due to each Creditor. e) Cash repayment Within 60 days from the date of Plan approval, STECON will repay Baht 100,000,000 Outstanding Principal to Class 1 and Class 3 Creditors in cash proportionate to the Outstanding Principal due to each Creditor. f) Extension of repayment STECON will repay its Baht 600,000,000 Outstanding Principal to Class 1 and Class 3 Creditors in installments over 6 years g) Repayment to Class 4, 5, 6, 7, and 8 Creditors 1) Class 4, 5, and 7 Creditors will be repaid within 60 days of Plan approval. 2) Class 6 Creditors will be repaid either within 60 days of the date that the Official Receiver ("OR") or the Court gives an ultimate decision that these Creditors have the right to demand repayment from STECON, or the date of Plan approval, whichever date occurs later. 3) Class 8 Creditors will be repaid the outstanding Letter of Guarantee fees accrued before January 17, 2000, within 60 days of Plan approval. h) Debt forgiveness On the date that the Plan Administrator completes steps a) to e) above and notifies such completion to the Creditors Committee in writing, any and all of STECON's outstanding debt (except that described in f) and g) above) e.g., outstanding interest or withholding tax thereof, shall be forgiven. Debt Repayment According to Creditor Class Class 1 Creditors STECON will proceed as follows: a) Within 60 days of Plan approval, STECON will repay Baht 96,291,452.60 to Class 1 Creditors proportionate to the Outstanding Principal due to each Creditor. b) Within 60 days of Plan approval, STECON will convert Baht 3,370,200,820 of debt into Group 2 Shares as per clause 7.2 a) and will distribute the said shares to Class 1 Creditors proportionate to the Outstanding Principal due to each Creditor. c) Within 60 days of Plan approval, STECON will repay Baht 5,515,966.17 of debt proportionate to the Outstanding Principal due to each Creditor, via the transfer of its Non-Core Assets d) STECON will repay Baht 577,748,715.63 of debt proportionate to the Outstanding Principal due to each Creditor in installments over 6 years, with 6% interest per annum. BIBF Class 1 Creditors who are owed foreign currency-denominated Outstanding Principal will be repaid as follows: - Repayment as per a) and d) above will be in Baht. The Plan Administrator will convert the proportionate amount of Outstanding Principal due using the Bank of Thailand's exchange rate on the Appointment Date, and will repay the said amount to the said Creditors' Facility Agent. The Facility Agent will convert this Baht repayment to foreign currency using the exchange rate of the date that the Facility Agent repays the said Creditors. - Repayment as per b) and c) above will be proportionate to the amount of Outstanding Principal due using the Bank of Thailand's exchange rate on the Appointment Date. Class 2 Creditors STECON will proceed as follows: a) Within 60 days of Plan approval, each Class 2 Creditor must confirm its provision of working capital to STECON for no less than 6 years at the MOR interest rate of each Bank Creditor. Within 15 days of receipt of such confirmation, STECON will execute the Working Capital Lending Agreement with Class 2 Creditors according to the total debt on the Appointment Date. b) In the event that any Class 2 Creditor does not confirm the said provision of working capital to STECON for the period specified as per a) above, the debt for which repayment has been applied that is due to the said Class 2 Creditor will become due at the end of 3 years, from the date of Plan approval, without interest. Class 3 Creditors STECON will proceed as follows: a) Within 60 days of Plan approval, STECON will repay Baht 3,708,547.40 of debt proportionate to the Outstanding Principal due to each Class 3 Creditor. b) Within 60 days of Plan approval, STECON will convert Baht 129,799,180 of debt into Group 2 Shares as per clause 7.2 a), and will distribute the said shares to Class 3 Creditors proportionate to the Outstanding Principal due to each Creditor. c) STECON will repay Baht 22,251,284.37 proportionate to the Outstanding Principal due to each Creditor in installments over 6 years, with 6% interest per annum. Class 4 Creditors STECON will repay all its Outstanding Principal due to Class 4 Creditors within 60 days of Plan approval. Class 5 Creditors STECON will repay all its Outstanding Principal due to Class 5 Creditors within 60 days of Plan approval. Class 6 Creditors STECON will repay all its Outstanding Principal due to Class 6 Creditors within 60 days of the date that the OR or the Court gives an ultimate decision that the said Class 6 Creditors have the right to demand repayment from STECON, or the date of Plan approval, whichever date occurs later. Class 7 Creditors STECON will repay all its Outstanding Principal due to Class 7 Creditors within 60 days of Plan Approval. In the event that any of the said Outstanding Principal is denominated in foreign currency, STECON will make such repayment in Baht using the Bank of Thailand's exchange rate on the Appointment Date. Class 8 Creditors STECON will proceed as follows: a) Within 60 days of Plan approval, STECON will repay Baht 1,730,320.29 for the outstanding Letter of Guarantee fees accrued before January 17, 2000. b) Class 8 Creditors will be repaid according to the Guarantee Agreement. PLAN APPROVAL AND IMPLEMENTATION The steps required for approval and implementation of the Plan are as follows: a) Approval of Meeting of Creditors; b) Appointment of the Plan Administrator; c) Approval of the Court; d) Appointment of Creditors Committee; e) Implementation of Business Reorganization steps (a) - e)); and f) Cancellation of the business reorganization by the Court. Indicative Timetable The following is an indicative time plan for approval and implementation of the Plan: Date Process within August 2000 - Submission of the Plan for Creditors approval - Meeting of Creditors convened by the OR - Special resolution of Meeting of Creditors approving the Plan and resolution appointing the Creditors Committee within September 2000 Court approval of the appointment of Creditors Committee within April 2001 - Implementation of the Plan Completed - Court cancellation of the Plan Report on the progress of Business Reorganization Plan Business Reorganization Steps Results a) The increase of registered capital 100% completed since November 2, 2000 b) The purchase of newly issued shares by the 100% completed since November 2, 2000 Majority Shareholder c) The debt-equity conversion of the Financial Creditors 100% completed since November 20, 2000 d) The transfer of Non-Core Assets to the Asset 100% completed since November 6, 2000 Management Company ("AMC") e) Cash Repayment 100% completed since November 17, 2000 g) Repayment to Class 4,5,6,7, and 8 Creditors (1) Class 4 Creditors 99.6% completed Class 5 Creditors 42.7% completed Class 7 Creditors 100% completed (3) Class 8 Creditors 100% completed Next Implementation Business Reorganization Steps Completed date f) Extension of repayment December 30, 2006 g) Repayment to Class 4,5,6,7, and 8 Creditors (2) Class 6 Creditors Repay to Class 6 Creditors either within 60 days of the date that the Official Receiver or the Court gives an ultimate decision that these Creditors have the right to demand repayment from STECON or the date of Plan approval, whichever date occurs later h) Debt forgiveness On the date that the Plan Administrator completes steps a) to e), any of STECON's outstanding debt eg. Outstanding interest or withholding tax thereof, shall be forgiven The Court appeals the rehabilitation Under the Court consideration - After finishing the rehabilitation steps (a) (e) and approved by the creditors' meeting, the Plan Administrator has submitted the petition for appealing the rehabilitation to the Central Bankruptcy Court since December 4, 2000 No Dividends For 5 Years STECON undertakes not to pay dividends for a period of 5 years to further ensure the Creditors that STECON can meet its restructured debt obligations. Non-Operation of Sino-Thai Construction Service Company Limited (STC) The Plan calls for STC (Subsidiary) to become a non-operating company to save costs and pool resources. The entity itself needs to be retained, as it still has some pending contracts with the Bangkok Metropolitan Authority, under which it will receive payments. Liquidity Requirement It is envisioned that STECON will finance new construction work on a project finance basis, and not by using working capital.