- Translation -

No. 1283725 August 2020

Subject: Additional Clarification on Assistance Measures regarding the Extension of Contract Term and the Adjustment of Minimum Guarantee Collection for the King Power Group

To: President,

The Stock Exchange of Thailand

Reference: Letter of Airports of Thailand Public Company Limited No. 11380/2020, dated 30 July 2020

Reference is made to the Letter of Airports of Thailand Public Company Limited (AOT), informing the assistance measures for the concessionaires, namely the King Power Group, affected by the Coronavirus Disease 2019 (COVID-19) outbreak, by means of the extension of time for area improvement and decoration, the postponement of operations and the determination of minimum guarantee collection for duty-free shop and commercial activity management concessions.

Due to many inquiries from investors regarding the assistance measures for the King Power Group, AOT therefore would like to additionally clarify such matter as follows:

1. Rationale and approach to the establishment of assistance measures for the concessionaires and airlines at all six airports under AOT's supervision (comprising Suvarnabhumi Airport (BKK), Don Mueang International Airport (DMK), Phuket International Airport (HKT), Chiang Mai International Airport (CNX), Hat Yai International Airport (HDY) and Mae Fah Luang-ChiangRai International Airport (CEI)

The travel restrictions to control the COVID-19 outbreak, imposed by various countries, including Thailand, have brought inbound and outbound travel to a standstill, and continuously caused a drop in overall passenger numbers at AOT's airports. Moreover, the concessionaires and airlines with over 1,000 contracts have been faced with a drop in revenue while bearing the burden of expenses.

In light of the decline in passenger numbers and conformity to the government's policy, AOT, as a state enterprise, has therefore established the assistance measures for the concessionaires and airlines.

The assistance measures as requested by the concessionaires and airlines have been established based on the situations in each period as follows:

1.1 The AOT Board of Directors Meeting No. 3/2020 held on 19 February 2020, resolved to approve the assistance measures for the concessionaires who are contract parties to AOT

by collecting the percentage-based concession charges from the operating revenue only, while exempting the collection of minimum guarantee, during 1 February 2020 - 31 March 2022 as well as extending

a 6-month credit term of payment for concession charges for installments due during February - July 2020. Details of the aforesaid assistance measures appear in the Letter of AOT

No. 2834/2020, dated 19 February 2020.

333 ถนนเชิดวุฒากาศ สีกัน ดอนเมือง กรุงเทพฯ 10210333 Cherdwutagard Road, Srikan, Don Mueang, Bangkok 10210, Thailand WEBSITE : http://www.airportthai.co.th

โทรศัพท์ : 66(0) 2535-1192

Tel

: 66(0) 2535-1192

โทรสาร : 66(0) 2535-4061

Fax

: 66(0) 2535-4061

ทะเบียนเลขที่ 0107545000292

Registration No. 0107545000292

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  1. The AOT Board of Directors Meeting No. 5/2020 held on 22 April 2020 approved to determine the rates of fixed concession charges and minimum guarantee for commercial activities after the ending of the assistance measures under item 1.1 on 31 March 2022. AOT shall collect
    the minimum guarantee by applying the minimum guarantee of 2019as the calculation base. AOT has also established additional assistance measures such as a 50% reduction in landing and parking charges, aircraft service charges and office and state property rents, offered a 6-month credit term of payment for those expenses until December 2020 as well as set an approach to the application of the minimum guarantee after the ending of the assistance measures so as to ensure fairness among contract parties.
    Details of the aforesaid assistance measures appear in the Letter of AOT No. 6383/2020, dated 23 April 2020.
  2. Since the COVID-19 situation has not yet been resolved, the AOT Board

of Directors Meeting No. 8/2020 held on 24 July 2020 then approved the extension of a 12-month credit term of payment, instead of a 6-month credit term of payment, for concession charges, for monthly installments due during February - July 2020, to the concessionaires and airlines.

Details of the aforesaid assistance measures appear in the Letter of AOT No. 11328/2020, dated 29 July 2020.

2. Approach to the establishment of assistance measures for the King Power Group

The King Power Group was selected as the preferred bidder for the 10-year and 6-month contract during 28 September 2020 - 31 March 2031 to operate duty-free shops at BKK, HKT, CNX and HDY and manage commercial activities at BKK. The first six months of the contract is prescribed as a period for area improvement and decoration in the main Passenger Terminal Building and

the Satellite 1 (SAT-1). However, the COVID-19 outbreak has obstructed the concessionaires to be able to prepare for the area improvement and decoration as previously scheduled as well as affected

the plan for the opening of the SAT-1, which had been previously scheduled to commence operations by 2020, to be postponed to October 2022 (AOT considered such schedule based on major factors in terms of end date, system test as well as expected increase in the number of passengers to prevent the impacts on AOT's expenses).

Besides the above-mentioned factors, the assistance measures under item 1 also did not cover the King Power Group's contract whereby the first year's minimum guarantee based on the passenger volume forecast in 2021 was proposed before the spread of COVID-19. The King Power Group then submitted a letter requesting AOT to consider the assistance measures as in line with the facts. The AOT Board of Directors Meeting No. 8/2020 held on 29 July 2020 therefore approved to postpone another one year for area improvement and decoration, extend the contract term for another one year, from previously on 31 March 2031 to 31 March 2032, as well as adjust the collection of minimum guarantee since 1 April 2022 by applying sharing per head specified in the King Power Group's bid proposals to the calculation in conjunction with the actual passenger volume of such given year, while still collecting the percentage-based concession charges. As soon as the passenger volume is equal to the passenger volume forecast conducted by the Group, AOT will further increase the minimum guarantee by means of the calculation formula as determined in the contract.

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Details of the aforesaid assistance measures appear in the Letter of AOT No. 11380/2020, dated 30 July 2020.

  1. AOT would like to inform that the assistance measures for the concessionaires and airlines affected by the COVID-19 outbreak as mentioned above were prudently considered based on various factors including fairness as well as shareholders' interests. As soon as the situations return to normal, AOT's operations can continue without interruption, thus having positive impacts on AOT's operations and the national economy as a whole.
  2. Given that AOT's operations have been significantly affected by the COVID-19 outbreak, AOT then submitted a letter informing the air traffic forecasts during 2020 - 2022 and expected decrease in revenue to the Stock Exchange of Thailand for acknowledgement according to the Letter of AOT No. 9379/2020, dated 17 June 2020. When considering these forecasts together with the assistance measures under items 1 and 2, the impacts on AOT's revenue can be as follows:
    In 2020, AOT expects a 50.70% decrease in revenue, compared to the revenue
    in fiscal year 2019.
    In 2021, AOT expects a 42.21% decrease in revenue, compared to the revenue
    in fiscal year 2020.
    In 2022, AOT expects a 188.13% increase in revenue, compared to the revenue
    in fiscal year 2021.
    However, such predictions are based on the assumption that the COVID-19 vaccines are developed and the passenger volume in 2022 accounts for 76%of that in 2019 (the year before the emergence of COVID-19).
    Please be informed accordingly.

Yours sincerely,

NITINAI SIRISMATTHAKARN

President

Authorized Person

The Corporate Secretary and Corporate Governance Department

Tel. 0 2535 5260

Fax. 0 2535 5189

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AOT - Airports of Thailand pcl published this content on 26 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 August 2020 01:51:11 UTC