Bangkok, June 29, 2015 ? The SEC advised shareholders of Chai Watana Tannery Group Public Company Limited (CWT) to study CWT?s investment proposal for waste incineration plant project. As the proposed investment is subject to shareholders? approval, CWT shareholders should exercise voting rights at the extraordinary shareholders? meeting on July 1, 2015.

CWT?s proposal to invest in THB 1,469 million waste incineration plant project through a holding company, co-founded by CWT, Zero Waste Co.,Ltd (Zero Waste), and LAWI Engineering (Thailand) Co.,Ltd (LAWI), is material asset acquisition. Accordingly, the transaction is subject to the prior approval of the shareholders? meeting.  CWT board of directors and audit committee viewed that the investment project is beneficial and appropriate reasoning that it is a potential project with ability to generate profit and create value to the shareholders continually.

The independent financial advisor (IFA), on the contrary, opined that CWT shareholders should not approve the proposed transaction due to limited information and uncertainty in material information. CWT has been in a municipality?s process of proposal submission for operating the waste incineration plant project where it has not been notified if the approval will be granted.

In addition, CWT could not submit to IFA any material agreements, such as joint venture agreement between Zero Waste, and LAWI, waste management agreement with the municipality, power purchase agreement with the Provincial Electricity Authority. Besides, based on CWT?s assumption, IFA also found that if investment in the project would not go as planned where investment proceeds increase while income does not, the net cash flow will be negative. 

In this regard, the SEC advises CWT shareholders to carefully study the information, exercise their rights at the shareholders? meeting on July 1, 2015 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.