[Translation] Ref. PDI.B.02.108/98 7 October 1998 To : President The Stock Exchange of Thailand Re : Appointment of new directors, chairman of the board and president & CEO, revision of power of directors, signing of financial agreements, allotment and offering of capital increase shares and appointment of an executive We would like to inform the SET that the board of directors of Padaeng Industry Public Company Limited (PDI) at its meeting, No. 6/1998 held on 29 September 1998 and continued on 6 October 1998 has resolved the following : 1. Appointed four new directors in replacing the vacated posts namely, (1) Mr. Suparut Kawatkul for the remaining term of Mr. Bodi Chunnananda; (2) Mr. Roderick John Webster for the remaining term of Mr. Damrong Krishnamara; (3) Mr. John Grahame Young for the remaining term of Mr. Staporn Kavitanon; and (4) Mr. Brett Thomas Lambert for the remaining term of Dr. Chirayu Isarangkun Na Ayutthaya. In addition, Mr. Arsa Sarasin was elected as the new chairman of the board and Mr. Brett Lambert as the new President & CEO, and the power of directors was amended to be as follows : .../2 - 2 - 'The Directors having the power to sign on behalf of and bind the Company are as follows: "Mr. Arsa Sarasin, Chairman of the Board of Directors and Executive Chairman or Mr. Brett Thomas Lambert, President, signs and affixes the Company's seal or any two directors jointly sign and affix the Company's seal."' 2. Approved 4 financial agreements - that is (1) Override agreement to be signed with the local and foreign creditors for extending long- and short-term debt outstandings until March 2002. Funds for loan repayments would be derived partly from an offering of the remaining 81,630,442 new ordinary shares amounting to Bt1,142.83m to an Australian investor (Western Metals group -WML). The remainder would be acquired from operations. Major contents include : (a) Principal : Approximately Bt2,285m (divided into Bt874m and US$34.4m) (b) Repayment : 3 1/2 years or 42 months divided into 8 installments at 6 months each, and interest payment at every 3 months (c) Security : Mortgages of land, buildings and machinery (d) Conditions : - Debt-to-equity shall not exceed 2 to 1 - If the total debt outstandings are less than 50%, an annual dividend of not exceeding 25% of net income can be declared. - The company may have a monthly cash cushion amount equivalent of US$5m or Bt200m as working capital. (2) Share subscription agreement (SSA) to be signed with WML. This new SSA supersedes the previous agreememt signed on 23 July 1998. (3) Supplementary agreement, to be jointly signed with WML and the creditors, in which WML .../3 - 3 - (in its capacity of a new investor) would pay the interests for a principal not exceeding US$23m or Bt1,051.40m (equivalent to total payment amount for the 2nd-4th share subscription). The interest and principal amounts would be reduced after each payment for share subscription. And (4) Escrow agreement to be jointly signed with WML, The Siam Commercial Bank Plc. in its capacity as an agent to keep the new share certificate(s) during which total payment for the share subscription has not been completed, and The Chase Manhattan Bank in its capacity as the creditors' facility agent. The above-referred agreements were due for signing on 7 October 1998 3. Approved allotment and offering of the remaining 81,630,442 new ordinary shares at a par value of Bt10 each as a private placement to Western Metals International Pty. Ltd., an institutional investor qualified in 17 categories in an announcement of the Securities and Exchange Commission (SEC) at Bt14 per share. Payment for the share subscription is made as follows : First payment for 6,530,435 shares totalling Bt91,426,090 to be made by 9 October 1998; Second payment for 13,060,870 shares totalling Bt182,852,180 to be made by 28 February 1999; Third payment for 13,060,870 shares totalling Bt182,852,180 to be made by 31 March 1999; and Fourth payment for 48,978,267 shares totalling Bt685,695,738 to be made by 31 July 1999. In this regard, WML has obtained a waiver from the requirement to make a tender offer from the office of the SEC on 3 August 1998. .../4 - 4 - Objective of the share offering : to finance debt outstandings. Prior to the allotment, WML holds 7 million shares or 4.85% of total paid-up shares. After the first payment, WML will hold a total of 13,530,435 shares or 8.96% of the paid-up capital. Expected benefits : With lessening principal and interest burden, the creditors have greate confidence in the Company's financial position and therefore agreed to extend the repayments of total outstandings as referred above. In addition, following payments for new shares offered, which would affect the Company's shareholding structure, the structure of the board of directors has to be reviewed - that is, after the second payment by end-February 1999, the board of directors would consist of 11 directors, namely 5 members representing PDI, 4 members representing WML and 2 independent directors. 4. Acknowledged appointment of Mrs. Anita Maria Chanrasmi as Senior Vice President attached to Bangkok Office effective from 1 October 1998. Yours truly, - Signature - (Arsa Sarasin) Executive Chairman Board Secretary Division Human Resources & Corporate Administration Department