Opinion of the Independent Financial Advisor Regarding to the Asset Disposal Of Singha Estate ...

308 Pages·2016·7.32 MB·English

by  Silom Advisory

(Translation)
Opinion of the Independent Financial Advisor
Regarding to the Asset Disposal

Of

Singha Estate Public Company Limited

Prepared by

Silom Advisory Company Limited

25 October 2016
Opinion of the Independent Financial Advisor Regarding to the Asset Disposal
25 October 2016

To: Shareholders
Singha Estate Public Company Limited (the “Company”)

Subject: The IFA’s Opinion regarding the disposal of Nirvana’s shares of 4,481,717 shares at the par value
of 100.00 Baht, accounting for 51.00 percent of total paid-up shares of Nirvana and 2 plots of lands
to Daii in which Daii will issue and offer its newly issued ordinary shares to the Company of
658,599,968 shares at the par value of 1.00 Baht and the acquisition price of 5.00 Baht in order to
exchange for Nirvana’ shares and 2 plots of lands instead of cash payment

The Board of Directors meeting no. 6/2559 held on 2 September 2016 has approved to propose into
shareholders meeting to consider an approval of (a) a disposal of Nirvana’s common stocks of 4,481,717 shares
at par value of 100.00 baht each which is 51.00% of all Nirvana’s issued and fully paid-up share capital with the
transaction value of not exceeding 2,142.00 million baht and (b) a disposal of 2 plots of land with the transaction
value of 1,253.00 million baht. The total value gain from the transactions will not altogether exceed 3,395.00
million baht by transferring to Daii’s as an exchange of Daii’s new ordinary shares to be issued to Nirvana for
maximum 678,999,969 shares at par value of 1.00 baht for the value of 5.00 baht each or not less than 55.63
% of all Daii’s issued and fully paid-up share capital after the completed transactions. (The proportion was
calculated on the assumption that other shareholders of Nirvana, other than the company, will dispose all shares
in Nirvana to Daii). By capital increase, Daii will issue and allocate the ordinary shares to the company as a
private placement which is subjected to the result of Daii’s due diligence to be made in accordance with the
memorandum of agreement.
Later, the Board of Directors meeting no.8/2559 held on 12 October 2016 at 16.00 hr., after having
examined Daii’s due diligence report, has approved to propose into shareholders meeting to consider an approval
of (a) a selling of Nirvana’s ordinary shares of 4,481,717 shares at par value of 100.00 baht each which is
51.00% of all Nirvana’s issued and fully paid-up share capital with the transaction value of approximately 2,040
million baht to be the swap of Nirvana’s 1 ordinary share per Daii’s 91.036531 ordinary shares, (fraction of Daii’s
shares from calculation will be rounded off) and (b) a disposal of 2 plots of land with the transaction value of
1,253.00 million baht. The total value gain from the transactions will not altogether exceed 3,293.00 million baht
selling to Daii’s in exchange of Daii’s new ordinary shares to be issued to Nirvana for 658,599,968 shares at par
value of 1.00 baht for the value of 5.00 baht each which is the 55.79% of all Daii’s issued and fully paid-up share
capital after the completed transaction. (The proportion was calculated on the assumption that other shareholders
of Nirvana other than the company will dispose all shares in Nirvana to Daii) Total value gained from the
transactions is 3,293.00 million baht. By this capital increase, Daii will issue and allocate the ordinary shares to
the company as a private placement.
By the entry to the transactions, Nirvana will hold Daii shares for 658,599,968 shares at par value of 1.00
baht each which is the 55.79% of all Daii’s issued and fully paid-up share capital after the completed transaction.
Opinion of the Independent Financial Advisor
Opinion of the Independent Financial Advisor Regarding to the Asset Disposal
The company is then obliged to do a tender offer to purchase all Daii’s shares in accordance with the rules and
procedures for complying with the “Notification Regarding the Acquisition of Securities for Business Takeovers”.
In addition, as per Daii’s information published openly in SET’s information system, Daii will take over all
Nirvana’s businesses including all assets, liabilities, rights and obligations. Nirvana will finally make a request for
company dissolution. The advisor expects that all taking over procedures will happen within the same taxation
year as the assets transferring in order to comply with the rule of concerning law and regulation.
Under the memorandum of agreement, Dcorp, a major shareholder of Daii, expressed its willing to sell its
ordinary shares in Daii for 45,995,952 shares to the company per the tender offer under the condition agreed
between the company and Dcorp that no one will sell, lend or transfer the remaining shares in Daii to other(s)
within 30 days after the entry to said transactions.
This entry into the transaction of Nirvana which is considered to be a purchasing or taking a transfer of
any other company‘s business to be owned by the company falls under “the rule of Section 107 (2) (b) of Public
Limited Companies Act” that required votes of not less than three-fourths of the total number of votes of
shareholders who presented at the meeting and are entitled to vote.
Apart from that, the selling of shares and 2 plots of land made the total transaction value reaching 126.28
percent of net profit from normal operating activities which falls under criteria of “type1 transaction on acquisition or
disposal of securities of any business”, the Company, therefore, has to report such transactions to the Securities
and Exchange Commission without delay, and has to appoint an independent financial advisor to evaluate the
transactions and provide an independent report as well as to set up a shareholders meeting to get approval on the
entry to the transactions with votes of not less than three-fourths of the total number of votes of shareholders who
presented at the meeting and are entitled to vote, excluding those with stake holding.
In order to provide sufficient information to the shareholders, the Company, therefore, appointed Siloam
Advisory C., Ltd. (“the IFA”) as the independent financial advisor to evaluate the transactions and provide its
opinions to report to the shareholders.
In order to calculate the number in this report, some figures and values are typically rounded up by two
or three digits based on case by case in which the derived numbers may not equal to such figure and value
appeared in this report.

Opinion of the Independent Financial Advisor
Opinion of the Independent Financial Advisor Regarding to the Asset Disposal
Index

Page
Section 1 Executive Summary Section1 page 1

Section 2 Practice and Information Used in the Preparation of IFA Report Section2 page 1

Section 3 Details of transaction Section3 page 1
3.1 General description of the transaction Section3 page 1
3.2 Day, month, year of the transactions Section3 page 7
3.3 The parties concerned and the relationship of the parties Section3 page 7
3.4 Criteria used for valuation of the disposal of the securities Section3 page 7
3.5 Detail of the disposal of the assets Section3 page 11
3.6 Detail of acquired assets Section3 page 17
3.7 Significant conditions of the entry to the transactions Section3 page 18
3.8 Dividing of businesses to avoid the conflicts of interests Section3 page 19

Section 4 Appropriateness of the Transaction Section4 page 1
4.1 Objective of disposal of asset/project transaction Section4 page 1
4.2 Advantages of the transaction Section4 page 1
4.3 Disadvantages of the transaction Section4 page 2
4.4 Risk of the transaction Section4 page 3
4.5 Pros and Cons comparation of not participating in this transaction Section4 page 5
Section 5 Valuation Section5 page 1
5.1 Singha Estate Public Company Limited’s Land to be Sold Section5 page 1
5.1.1 Book Value Approach Section5 page 1
5.1.2 Adjusted Book Value Approach Section5 page 1
5.2 Nirvana Development Company Limited Section5 page 2
5.2.1 Book Value Approach Section5 page 2
5.2.2 Adjusted Book Value Approach Section5 page 2
5.2.3 Market Comparable Approach Section5 page 4
5.2.4 Discounted Cash Flow Approach Section5 page 8
5.3 Daii Group Public Company Limited Section5 page 48
5.3.1 Book Value Approach Section5 page 48
5.3.2 Adjusted Book Value Approach Section5 page 48
5.3.3 Market Approach Section5 page 50
5.3.4 Market Comparable Approach Section5 page 50
5.3.5 Discounted Cash Flow Approach Section5 page 54
5.4 Summary of valuation Section5 page 62
Context
Opinion of the Independent Financial Advisor Regarding to the Asset Disposal
Page

Section 6 Summary of the Opinion of the Independent Financial Advisor Section6 page 1

Attachment
Attachment 1 Information of Singha Estate Public Company Limited
Attachment 2 Information of Nirvana Development Company Limited
Attachment 3 Information of Daii Group Public Company Limited
Attachment 4 Summary detail of contracts and important documents
Attachment 5 Summary of Appraisal Report
Attachment 6 Land Purchase Agreement between Nirvana and Bangkok Land Public Company Limited
Attachment 7 Assumption on Discount rate

Context
Opinion of the Independent Financial Advisor Regarding to the Asset Disposal
Glossary

Abbreviation Definition
S or the Company : Singha Estate Public Company Limited
Nirvana : Nirvana Development Company Limited
Daii : Daii Group Public Company Limited
Dcorp : Dcorp Group Company Limited
IFA : Silom Advisory Company Limited or Independent Financial Advisor
SEC : The Securities and Exchange Commission
SET : The Stock Exchange of Thailand
Opinion of the Independent : Opinion of the Independent Financial Advisor regarding the Assets Disposal
Financial Advisor Transaction
Assets Disposal Transaction : The selling of issued ordinary shares in Nirvana which the Company hold
in an amount of 4,481,717 shares at the par value of 100.00 Baht, or
equivalent to 51.00 percent of Nirvana paid-up capital and the Two Plots of
Land to Daii. To compensate for Company’s transferred assets, Daii will
issued and offered newly issued ordinary shares in an amount of
658,599,968 shares at the par value of 1.00 Baht with the offering price of
5.00 Baht instead of cash payment.
Disposal of Nirvana Shares : The selling of issued ordinary shares in Nirvana which the Company hold
in an amount of 4,481,717 shares at the par value of 100.00 Baht, or
equivalent to 51.00 percent of Nirvana paid-up capital. To compensate for
Company’s transferred assets, Daii will issued and offered newly issued
ordinary shares in an amount of 407,999,968 shares at the par value of
1.00 Baht with the offering price of 5.00 Baht instead of cash payment.
Disposal of the Two Plots of : The selling of the Two Plots of Land to Daii. To compensate for Company’s
Land transferred assets, Daii will issued and offered newly issued ordinary shares
in an amount of 250,600,000 shares at the par value of 1.00 Baht with the
offering price of 5.00 Baht instead of cash payment.
Two Plots of Land : Land Located at Bangrakyai and Land Located at Rattanathibhet
Land Located at Bangrakyai : Land located at Bangrakyai area which consist of deed title no.285508,
covering area of 4 Rais 1 Ngans 98.2 Sq.w. located at Rattanathibhet Road
(Highway no.302), Bangrakyai Sub-district, Bangbuathong District,
Nonthaburi.
Land Located at Rattanathibhet : Land located at Rattanathibhet area which consist of deed title no.1922,
no.252018 and no.252019, covering area of 7 Rais 3 Ngan 50. Sq.w.
located at Rattanathibhet Raod, Bangkrasor Sub-district, Muang Nonthaburi
District, Nonthaburi.
Tender Offer : The tender offer for all shares of Daii
Glossary
Opinion of the Independent Financial Advisor Regarding to the Asset Disposal
Abbreviation Definition
MOU : Memorandum of Understanding on an investment in Daii Group Public
Company Limited
SSA : Share subscription agreement with condition precedent
Warrant : Warranty agreement of Dcorp Group Company Limited
EBT : Entire Business Transfer
PLC Act : Public Limited Companies Act B.E.2535 (B.C.1992) (As amended)
Securities Act : Securities and Exchange Act B.E.2535 (B.C.1992) (As amended)
PP Notifications : The Notification of the Capital Market Supervisory Board No. TorChor.
72/2558, Re: Approval of Offering for Sale of Newly Issue Shares by Listed
Companies to the Specific Persons dated 28 October 2015 (as amended)

Notifications on Asset : The Notification of the Capital Market Supervisory Board No. TorChor.
Acquisition and Disposal 20/2551, Re: Rules on Entering into Material Transactions Deemed as
Acquisition or Disposal of Assets, dated 31 August 2008 (as amended),
and the Notification of the Board of Governors of the Stock Exchange of
Thailand, Re: Disclosure of Information and Other Acts of Listed Companies
Concerning the Acquisition and Disposition of Assets, dated 29 October
2004 (as amended)
Notifications on Connected : The Notification of the Capital Market Supervisory Board No. ThorJor.
Transactions 21/2551, Re: Rules on Connected Transactions dated 31 August 2008 (as
amended) and the Notification of the Board of Governors of the Stock
Exchange of Thailand, Re: Disclosure and Other Acts of Listed Companies
on Connected Transactions, dated 19 November 2003 (as amended)

Notifications on Acquisition of : The Notification of the Capital Market Supervisory Board No. ThorJor.
Securities for Business 12/2554, Re: Rules, Conditions and Procedures for Acquisition of Securities
Takeover for Business Takeover, dated 13 May 2011 (as amended)
P/E : Price to Earnings Ratio
P/BV : Price to Book Value Ratio

Glossary
Opinion of the Independent Financial Advisor Regarding to the Asset Disposal
Section 1 : Executive Summary
Board of Directors meeting no. 6/2559 held on 2 September 2016 has approved to propose into
shareholders meeting to consider an approval of (a) a disposal of Nirvana’s common stocks of 4,481,717 shares
at par value of 100.00 baht each which is 51.00% of all Nirvana’s issued and fully paid-up share capital with the
transaction value of not exceeding 2,142.00 million baht and (b) a disposal of 2 plots of land with the transaction
value of 1,253.00 million baht. The total value gain from the transactions will not altogether exceed 3,395.00
million baht by transferring to Daii’s as an exchange of Daii’s new ordinary shares to be issued to Nirvana for
maximum 678,999,969 shares at par value of 1.00 baht for the value of 5.00 baht each or not less than 55.63
% of all Daii’s issued and fully paid-up share capital after the completed transactions. (The proportion was
calculated on the assumption that other shareholders of Nirvana, other than the company, will dispose all shares
in Nirvana to Daii). By capital increase, Daii will issue and allocate the ordinary shares to the company as a
private placement which is subjected to the result of Daii’s due diligence to be made in accordance with the
memorandum of agreement.
Later, the Board of Directors meeting no.8/2559 held on 12 October 2016 at 16.00 hr., after having
examined Daii’s due diligence report, has approved to propose into shareholders meeting to consider an approval
of (a) a selling of Nirvana’s ordinary shares of 4,481,717 shares at par value of 100.00 baht each which is
51.00% of all Nirvana’s issued and fully paid-up share capital with the transaction value of approximately 2,040
million baht to be the swap of Nirvana’s 1 ordinary share per Daii’s 91.036531 ordinary shares, (fraction of Daii’s
shares from calculation will be rounded off) and (b) a disposal of 2 plots of land with the transaction value of
1,253.00 million baht. The total value gain from the transactions will not altogether exceed 3,293.00 million baht
selling to Daii’s in exchange of Daii’s new ordinary shares to be issued to Nirvana for 658,599,968 shares at par
value of 1.00 baht for the value of 5.00 baht each which is the 55.79% of all Daii’s issued and fully paid-up share
capital after the completed transaction. (The proportion was calculated on the assumption that other shareholders
of Nirvana other than the company will dispose all shares in Nirvana to Daii) Total value gained from the
transactions is 3,293.00 million baht. By this capital increase, Daii will issue and allocate the ordinary shares to
the company as a private placement.
By the entry to the transactions, Nirvana will hold Daii shares for 658,599,968 shares at par value of 1.00
baht each which is the 55.79% of all Daii’s issued and fully paid-up share capital after the completed transaction.
The company is then obliged to do a tender offer to purchase all Daii’s shares in accordance with the rules and
procedures for complying with the “Notification Regarding the Acquisition of Securities for Business Takeovers”.
In addition, as per Daii’s information published openly in SET’s information system, Daii will take over all
Nirvana’s businesses including all assets, liabilities, rights and obligations. Nirvana will finally make a request for
company dissolution. The advisor expects that all taking over procedures will happen within the same taxation
year as the assets transferring in order to comply with the rule of concerning law and regulation.
Under the memorandum of agreement, Dcorp, a major shareholder of Daii, expressed its willing to sell its
ordinary shares in Daii for 45,995,952 shares to the company per the tender offer under the condition agreed
between the company and Dcorp that no one will sell, lend or transfer the remaining shares in Daii to oher(s)
within 30 days after the entry to said transactions.
In this regard, the timeline can be concluded as below:
Section 1 - Page 1
Opinion of the Independent Financial Advisor Regarding to the Asset Disposal
Event Date
The Board of Director’s meeting of the company No. 2 September 2016
6/2016 has approved to the enter into Memorandum of
Understanding on an investment in Daii
Due diligence in Daii’s business 12 September 2016 to 30 September 2016
The Board of Director’s meeting of the company No. 12 September 2016
8/2016 has approved on the entering of the transaction
on asset disposal, Share Subscription Agreement and
Warranty Agreement.
Extraordinary General Meeting (EGM) to approve on 16 December 2016
the entering of the transaction
Entering of the transaction of asset disposal Expect to occur in 1st quarter of 2017
Tender offer After the entering to transaction of asset disposal
followed Acquisition of Securities for Business
Takeover Notification

Procedures of the entry to the transaction of asset disposal
1. The Company will sell (a) all of its own ordinary shares of Nirvana for 4,481,717 shares at par value of
100.00 baht each, which is the 51.00% of Nirvana’s issued and fully paid-up share capital with the transaction
value of not exceeding 2,142.00 million baht and (b) 2 plots of land with the transaction value of 1,253.00 million
baht. The total transactions value as sold to Daii will not altogether exceed 3,395.00 million baht which is made
as an exchange of Daii’s issuance of new ordinary shares to Nirvana for 658,599,968 shares at par value of 1.00
baht for the value of 5.00 baht each. It is divided into 2 portions, (1) 407,999,968 ordinary shares at par value of
1.00 baht for the value of 5.00 baht each as a return for the ordinary share of Nirvana instead of cash settlement
and (2) 250,600,000 Newly issued ordinary shares of Daii at par value of 1.00 baht for the value of 5.00 baht
each as a return for the 2 plots of land instead of cash settlement; Meanwhile, others shareholders of Nirvana
will sell their ordinary share of Nirvana to Daii for the exchange of newly issued ordinary shares of Daii at par
value of 1.00 baht for the value of 5.00 baht.

2. The company has to make a tender offer to purchase all stocks of Daii in accordance with the rules
and procedures for complying with the “Notification Regarding the Acquisition of Securities for Business
Takeovers” which is expected to be the maximum of 522,000,010 shares. (The proportion was calculated on the
Section 1 - Page 2
Opinion of the Independent Financial Advisor Regarding to the Asset Disposal
assumption that other shareholders of Nirvana, other than the company, will dispose all shares in Nirvana to
Daii)
Purchase price will be proposed in accordance with the rule of price valuation by tender offering to be
made under the ”Rules and Procedures for Complying with the Notification Regarding the Acquisition of Securities
for Business Takeovers”

3. Daii will take over all businesses of Nirvana (The subsidiary of the company) including all assets,
liabilities, rights and obligations, then, Nirvana (The subsidiary of the company) will finally make a request for its
company dissolution after the transaction. The advisor expects that all taking over procedures will happen within
the same taxation year as the assets transferring in order to comply with the rule of concerned law and regulation.

Structure of shareholding and ownership of equity
1. Before the entry to the transactions

2. After the entry to the transactions (The proportion was calculated on the assumption that other
shareholders of Nirvana other than the company will dispose all shares in Nirvana to Daii)

Section 1 - Page 3