Key Q&A of share acquisition in BLCP-Opportunity Day

No. EGCO 110/581 Date : November 23, 2006 Attn : President of the Stock Exchange of Thailand Subject : The Summary of Key Questions and Answers on the Opportunity Day Clarification of Share Acquisition in BLCP Power Company Limited Enclosure: Key Questions and Answers in the Opportunity Day Clarification of Share Acquisition in BLCP Power Company Limited Electricity Generating Public Company Limited (EGCOMP) hosted the Opportunity Day to announce its third quarter performance of 2006 and to clarify the connected transaction of the share acquisition in BLCP Power Company Limited, on Wednesday, November 22, 2006 from 9.00 to 12.00 hours at the Sai Samphan Auditorium, Floor 9, EGCO Tower, 222 Moo 5, Vibhavadi Rangsit Road, Tungsonghong, Laksi, Bangkok. In this regard, Kim Eng Securities (Thailand) Public Company Limited, an independent financial advisor, was invited to answer the questions with regard to the independent financial advisor report. With respect to this, EGCOMP would like to submit herewith the summary of key questions and answers about the BLCP transaction as detailed in the attachment. Please be informed accordingly. Yours sincerely, Visit Akaravinak President Corporate Secretary Division Tel. 0 2998 5020-4 Summary of key Q&A relating to BLCP Transaction Question When is the closing date to transfer the shares in BLCP Power Co., Ltd. from the CLP Group to EGCOMP? Answer The Closing Date is expected to be within the first quarter of 2007. Question What is the policy to record the good will from the BLCP transaction and at what amount? Will such goodwill be amortized? Answer EGCOMP may have to record the goodwill in its financial statements which represents the excess of the purchase price over the fair value of BLCP which, in this case, will equal to the net book value of the net identifiable assets at the date of acquisition. Such goodwill will be not be amortized. The goodwill will be reviewed whenever there is any sign of impairment. With regard to the financial consolidation on a proportionate basis, EGCOMP will discuss with the Auditor about whether it could proportionately consolidate BLCP financial statements. Question Does the CLP Group have a policy to divest its holding in Power Generation Services (PGS) to EGCOMP? Answer The CLP Group does have the intention to sell its stakes in PGS to EGCOMP. There will be a detailed discussion about this matter at a later date. QuestionWill EGCOMP nominate directors to sit on BLCP Board of Directors? Answer Since the share purchase has been signed between EGCOMP and CLP, Mr. Visit Akaravinak, EGCOMP President, will be nominated a BLCP director in the next Board of Director Meeting of BLCP. After the closing date, EGCOMP will be entitled to nominate 5 out of 10 directors in BLCP which EGCOMP would nominate the most appropriate and qualified persons to ensure its efficient governance in BLCP. Question What is the EIRR for BLCP transaction? Answer The Independent Financial Advisor (IFA) has applied the cost of equity of 14% to discount the free cash flows under the base case scenario. Since the acquisition price is lower than the base case price, the IFA opined that the EIRR should be higher than 14%. Question Is EIRR the key variable for the downside case and upside case as shown in the IFA report? Answer In conducting the sensitivity analysis, the IFA has taken into account various variables that may have an impact on the valuation of BLCP share. The variables that have the most significant impact on the pricing of BLCP share are cost of equity and net contracted available hours (Net CAH). The downside case was developed on the assumption that the cost of equity is higher than under the base case scenario while the Net CAH was lower than under the base case scenario, holding all other variables constant. The upside case was developed on the assumption that the cost of equity was lower than under the base case scenario, whereas the net CAH was higher than under the base case scenario, holding all other variables constant. Question Does EGCOMP have a policy for BLCP expansion? Answer EGCOMP has a policy to support BLCP expansion if such option is materialized.