Opinion of the Independent Financial Advisor on Connected ... Encl.6_GJS... · Information of SSG...

Opinion of the Independent Financial Advisor on Connected Transaction For

G J Steel Public Company Limited

Prepared by

JVS Financial Advisory Company Limited August 8, 2017

Opinion of the Independent Financial Advisor on Connected Transaction

Table of Contents

Executive Summary ....................................................................................................................................................... 6 Summary of the Independent Financial Advisor’s Opinion ......................................................................................... 8 Summary of the Independent Financial Advisor’s Overall Opinions ....................................................................... 12 Part 1 Connected Transaction 1. Characteristics, Type, and Size of the Transaction

1.1 Date of the Transaction .............................................................................................................................. 14 1.2 Relevant Parties .......................................................................................................................................... 14 1.3 General Characteristics and Size of the Transaction ................................................................................ 17 1.4 Total Value of Consideration, Payment Terms, and Basis used to determine Value of Consideration .. 19 1.5 List of Connected Persons and Relationship with the Company .............................................................. 19 1.6 Scope Characteristics of Conflict of Interest ............................................................................................. 21 1.7 Conditions of the Transaction .................................................................................................................... 21

2. Rationales of the Transaction 2.1 Background and Objective of the Transaction ......................................................................................... 23 2.2 Effects may occur to Shareholders ............................................................................................................ 45 2.3 Benefits or pros of the Transaction ............................................................................................................ 49 2.4 Cons of the Transactions ............................................................................................................................ 50 2.5 Risk Factors ................................................................................................................................................ 52 2.6 Comparison of Benefits and Effects between entering the Transaction with related persons and with

others........................................................................................................................................................... 53 2.7 Comparison of Benefits and Effects if do not enter the Transaction........................................................ 53

3. Valuation 3.1 Valuation of the Fair Value of the GJS Share Price ................................................................................ 55

4. Summary of the Opinions of the Independent Financial Advisor ......................................................................... 85 4.1 The Independent Financial Advisor’s Opinion regarding the Appropriateness of the Price .................. 85 4.2 The Independent Financial Advisor’s Opinion according to Benefits, Cons and Risk Factors of the

Company ..................................................................................................................................................... 85 4.3 Conditions for the Transaction and Opinion of the Independent Financial Advisor .............................. 89 4.4 Summary of the Independent Financial Advisor’s Overall Opinions ...................................................... 92

Part 2 Information of G J Steel Public Company Limited........................…………......................................................94 Information of SSG Capital Management........................ …….…………………............................................103 Part 3 Details of the appraised asset By American Appraisal (Thailand) Ltd.,…………………………...………..110


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Abbreviations and Definitions

SEC, The Office of SEC Securities and Exchange Commission SET, The Stock Exchange Stock Exchange of Thailand The Company, GJS G J Steel Public Company Limited GSTEL G Steel Public Company Limited GS SEC G S Security Holding Company Limited SSG CH SSG Capital Holdings Limited SSG III SSG Capital Partners III, L.P. SSG GP SSG Capital Partner III GP, L.P. SSG GPGP SSG Capital Partner III GPGP, Ltd. KG Kendrick Global Limited ACO I Asia Credit Opportunities I (Mauritius) Limited Link Capital I Link Capital I (Mauritius) Limited SSG Group SSG CH, SSG III and KG which are ACO I and Link Capital I Independent Financial Advisor, JVS FA

JVS Financial Advisory Company Limited

Connected Transaction Allocation and Offering of the Newly Issued Ordinary Shares of the Company under the Debt to Equity Conversion Scheme

WHT With Holding Tax


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No. Jor. 079/2560

August 8, 2017

Subject Opinion of the Independent Financial Advisor on Connected Transaction for G J Steel Public Company Limited

To Audit Committee and Shareholders G J Steel Public Company Limited

Refer : 1) Resolutions of the G J Steel Public Company Limited Board of Directors’ meetings No. 2/2013 held on July 14, 2017

(and the amendment) 2) Information Memorandum concerning the Connected Transaction of G J Steel Public Company Limited dated July 14,

2017 (and the amendment) 3) Information Memorandum concerning the Offering of the Newly Issued Ordinary Shares of G J Steel Public Company

Limited to Specific Investors (Private Placement) dated July 14, 2017 (and the amendment) 4) Financial Statements of G J Steel Public Company Limited as of December 31, 2014, December 31, 2015, December

31, 2016, March 31, 2017 reviewed by A.M.T. & Associates. 5) Draft Summary of Key Agreements related to the Connected Transaction of G J Steel Public Company Limited 6) Appraisal Report of the G J Steel Public Company Limited’ s Assets comprised of Land, Properties, and Machine

conducted by American Appraisal (Thailand) Company Limited dated June 14, 2017 7) Company Certificate, Memorandum of Association and other documents, including interviews with the management of

G J Steel Public Company Limited 8) Company Certificate, Memorandum of Association and other documents, including interviews with the management of

SSG Group 9) Draft Letter of the Request for Shareholders’ Meeting Resolution to Approve Acquisition of New Securities without

Requirement to Make a Tender Offer for All Securities of the Business ( Form 247- 7) prepared by Asia Credit Opportunities I (Mauritius) Limited

10) Information Memorandum concerning the Connected Transaction of G J Steel Public Company Limited dated July 14, 2017 (and the amendment)

11) Information Memorandum concerning the Offering of the Newly Issued Ordinary Shares of G J Steel Public Company Limited to Specific Investors (Private Placement) dated July 14, 2017 (and the amendment)

Remark : The exchange rate used in this document is equal to approximately 34.51 Baht/USD, which is the average foreign

exchange rate quoted by commercial banks between May 2, 2017 to May 26, 2017 and announced by the Bank of Thailand. Please see further information from the website of the Bank of Thailand at (www.bot.or.th).


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Disclaimers:

1) The study results and opinions, rendered by JVS Financial Advisory Company Limited ( “ Independent Financial Advisor” or “JVS FA”) in this report, are based on information and assumptions obtained from the management of G J Steel Public Company Limited and publicly disclosed information available in websites of the Office of the Securities and Exchange Commission (www.sec.or.th) and of the Stock Exchange of Thailand (www.set.or.th).

2) The Independent Financial Advisor assumes no responsibility for profit or loss and any impact arising from the Transaction and/or future performance arising from the Transaction.

3) The Independent Financial Advisor's study was conducted by using knowledge, skills, and cautions, based on sound professional practices.

4) The Independent Financial Advisor determined and gave the opinions on the Transaction based on current situations and information available to our knowledge. Any material adverse change and effect of the situations and information may affect the opinions provided herein by the Independent Financial Advisor.

5) The opinion report of the Independent Financial Advisor proposed to the Board of Directors, the Audit Committee and the shareholders of G J Steel Public Company Limited is not relevant to completion or success of the Transaction or accomplishment of G J Steel Public Company Limited.

Scope of the Report The report of the Independent Financial Advisor on the Connected Transaction is conducted with the objective to provide appropriate information of the Transaction for the Company and/ or the Company’ s shareholders to consider the Transaction. The report and responsibility of the Independent Financial Advisor have scope and limitation as follow: 1) The Independent Financial Advisor has only a duty to prepare the report of the Independent Financial Advisor’s opinion

on the Connected Transaction under this report only. The Independent Financial Advisor is not the Company’s financial advisor for entering the Connected Transaction.

2) The Independent Financial Advisor obtained information from the Company’s management, however, the Independent Financial Advisor does not guarantee correctness and completeness of all information. Thus, the report of the Independent Financial Advisor’ s opinion on the Connected Transaction is based on the assumption that obtained information and documents are correct and complete.

3) The report of the Independent Financial Advisor’ s opinion on the Connected Transaction has the objective to be an information for the Company’s shareholders’ consideration, nonetheless, the shareholders shall review the Company’s other information for their thorough consideration.

4) The report of the Independent Financial Advisor’s opinion on the Connected Transaction of G J Steel Public Company Limited does not intend to influence the share price of the Company or its subsidiaries.

http://www.set.or.th/


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Executive Summary

Transaction Background The Company was approached by the SSG Group led by SSG CH that expressed an intention to offer assistance in the debt restructuring of the Company and began conducting legal, accounting, and financial due diligence exercises. With the result of the due diligence, the SSG Group found to be satisfied and believed that it can improve the Company’s business. As the result, SSG Group started negotiations with the 4 major trade creditors of the Company and purchased debts from the creditors at the beginning of 2017. Besides the debt restructuring plan and the Company’ s operating performance enhancement, the SSG Group intends to give additional supports to other operations of the Company such as providing funds for capital expenditure and working capital, supporting financial contract negotiation with financial institutions, assisting for appropriate trade policy and condition for the Company in order to improve the Company’s production toward efficiency, and finding new marketing channels.

The G J Steel Public Company Limited Board of Directors’ Meeting No. 6/2017 held on July 14, 2017 resolved to propose the shareholders’ meeting to consider and approve the Debt to Equity Conversion Scheme.

Characteristics of the Transaction The Company sets the price of the Company’s newly issued ordinary shares at THB 0.3400 per share for the newly issued ordinary shares of not more than 3,343,000,000 shares, total value of not greater than THB 1,136,620,000.00 in order to repay the net trade debt of USD 32,934,250.00 or equivalent to THB 1,136,535,345.40 under the Debt to Equity Conversion Scheme. In this regard, the Company’ s criteria for determining the offering price are based on the negotiation and agreement between the 2 parties and the price based on the average closing price of the Company’ s shares traded on the SET from May 2 to May 26, 2017 ( equivalent to THB 0. 3267 per share) . The stated price was determined from the benefits that the Company will receive from the partial trade debt reduction (Haircut) by waiving of unpaid interest portion of USD 2,995,462, or equivalent to THB 103,371,065.81.

The Allocation and Offering of the Newly Issued Ordinary Shares of the Company under the Debt to Equity Conversion Scheme is deemed to be a connected transaction because after the acquisition of the Newly Issued Ordinary Shares, the SSG Group will directly hold 24 percent of the total issued shares of the Company and indirectly hold 18. 97 percent of the total issued shares of the Company through GSTEL ( after registration of the Company’s paid-up capital) 1, will nominate new directors to hold more than half of the board seats, and will appoint executives to hold key managerial positions, including the Chief Executive Officer (CEO) of the Company. Thus, such Allocation and Offering of the Newly Issued Ordinary Shares of the Company under the Debt to Equity Conversion Scheme is a transaction with a person who will become a controlling person of the Company and considered as a connected transaction of the Company.

1 If combining the Company’s capital increase due to the share allocation of the newly issued ordinary shares to accommodate the adjustment

of rights for the warrants of the Company based on the assumption that the warrants are exercised in full, ACO I will become a majority shareholder of the Company with a direct shareholding of 17.84 percent and an indirect shareholding of 22.48 of the total issued shares of the Company.


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Shareholding Structure of the SSG Group

Remark : 1. Has Ching Him Wong (holds 62.75 percent voting rights), Shyam Maheshwari (holds 18.625 percent voting rights), and Andreas Rizal Vourloumis (holds 18.625 percent voting rights) collectively hold equity voting shares in SSG CH with an aggregate amount of 100 percent. SSG CH owns 100 percent equity voting shares in SSG Capital Partners III GPGP, Ltd. (“SSG GPGP”), which is the general partner of SSG Capital Partner III GP, L.P. (“SSG GP”). SSG GPGP has its own investment committee and independent directors who have management control over SSG III’s operations.

2. SSG III is a Cayman Limited Partnership and is a collective Investment Fund which has capital commitments from the external investors who are limited partners (98.36 percent) and SSG GP (1.64 percent) . SSG GP is the general partner who has operational control over SSG III whereas the limited partners are essentially financial investors in SSG III who have no involvement with the operations of SSG III and do not have any relationship with the Company which would led to them being considered as connected persons of the Company . As of the date of this information memorandum, limited partners mainly comprise investors who are pension funds, sovereign wealth funds, family offices, insurance companies, endowment funds, and fund of funds. Specific details of the limited partners cannot be disclosed to public as they are prohibited under confidentiality agreements.

3. Link Capital I and ACO I are private limited companies set up as special purpose vehicles for investments by SSG III . The SSG Group has decided to have Link Capital I make investments as a secured creditor and have ACO I make investments as an unsecured creditor for ease of management and investment segregation . Moreover, the SSG Group’s investments do not have any conflict of interest with the Company and GSTEL.


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Summary of the Independent Financial Advisor’s Opinion The Independent Financial Advisor’s Opinion regarding the Appropriateness of the Price

The Independent Financial Advisor has considered and opined that the Connected Transaction of the Company by allocating and offering of the Company’s newly issued ordinary shares to the SSG Group under the Debt to Equity Conversion Scheme has the fair value of approximately THB 0.17 – 0.35 per share, which can be summarized as follow:

Appropriate Valuation Approach Valuation (THB per share)

Historical Market Price Approach 0.33 – 0.34 Discounted Cash Flow Approach (DCF) 0.17 – 0.35

The Independent Financial Advisor has an opinion that since the Company expects to allocate and offer the Company’ s newly issued ordinary shares to the SSG Group to repay the trade debts under the Debt to Equity Conversion Scheme, the share price of THB 0.3400 per share is deemed to be appropriate because the transaction price is in the range of the fair value evaluated by the Independent Financial Advisor.

The Independent Financial Advisor’s Opinion according to Benefits, Cons and Risk Factors of the Company can be summarized as follow:

Benefits or pros of the Transaction 1. Decrease the Company’s debt obligations

The Company will be able to reduce its debt obligation via the conversion of debt to equity which can decrease the Company’ s debt of USD 32,934,250. 00 or equivalent to THB 1,1 3 6 ,5 3 5 ,345. 40. The debt reduction can be separated into the accrued trade receivable of USD 32,345,883 or equivalent to THB 1,116,231,264.42 and the accrued interest of USD 588,367 or equivalent to THB 20,304,087.55. In addition, the Company will receive the 1st portion of the interest waiver of USD 2,995,462 and the 2nd portion of USD 765,190 together with the related withholding tax of USD 663,644. The interest waiver will be effective immediately if the Debt to Equity Conversion Transaction is approved by the shareholders’ meeting of GJS which will result to the reduction of the withholding tax. Total benefits that the Company gains from the debt reduction are USD 37,358,546 or equivalent to THB 1,289,214,378. The Connected Transaction will reduce future interest burden since the conversion of debt to equity can relieve the Company’s debt.

2. Have Additional Financial Supports After entering the Connected Transaction, if the Company can fulfill all of the conditions under the Credit Agreement stated in the Section 1. 7 Conditions of the Transaction, the Company will have a right to drawdown additional loans from the SSG Group for capital expenditure, working capital, and/ or for other debts repayment of the Company. Due to the Company currently experiences its operating losses from its business operation and has low level of cashflow from operating activities compared to the total liabilities according to the summary of Company’s financial statements. Such situation limited the Company’s ability to seek sources of funding from common financial institutions.

3. Increase the Production Efficiency After entering the Connected Transaction, if the Company can fulfill all of the conditions under the Credit Agreement of the SSG Group, the Company will have a right to drawdown additional loans from the SSG Group to maintain and improve its machine and equipment. This would enable the Company to run its full production capacity at 100,000 tons per month or equivalent to 100 percent of its maximum capacity and will enhance the Company’s operation. At the present, GJS has insufficient working capital to secure raw material for fullfill its maximum capacity ( Maximum Capacity) . Therefore, to benefit from save cost of electricity


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for smelting steel scrap, the Company currently chooses its production period to operate only during the low electricity usage ( Off Peak) . As the result, the Company could merely run its production at approximately 61 percent of the total capacity.

4. Enhance the Company’s business opportunity and development According to the Debt Restructuring Plan, the Company must hire Synergy Strategic Solutions Management DMCC ( “ Synergy” ) , a business and management advisory service provider whose clients include international steel manufacturers, having a team of experts with experience and reputation in managing the world’s leading companies in the steel industry. Moreover, one of the Synergy team members, namely Sudhir Maheshwari, has successfully revived financial status of several companies with a similar business to the Company in various countries and has work experience with ArcelorMittal engaging in the steel industry at the international level. The Synergy team will help to increase the Company’ s production and internal management efficiency resulting that the Company can decrease its production cost per unit and manage its inventory more efficient including trade agreement negotiation, which will enhance its product competitiveness. In addition, the Synergy team will give advice to the Company’s management and may be appointed in an important position of the Company. ( Please see additional details in Section 2. 1. 6 Other Related Information may affect Shareholders under Subsection J. Information of Synergy Strategic Solutions Management DMCC)

5. Increase Net Profit Margin The Company may have a superior net profit margin because of the reduction of its debt obligation which can immediately lessen its interest expenses. Furthermore, since the SSG Group will hire the team of experts with experience and reputation in managing the world’ s leading companies in the steel industry in order to increase the Company’ s production and internal management efficiency, the Company should be able to reduce its production cost per unit and can manage its inventory more efficient. (Please see additional details in Section 2. 1. 6 Other Related Information may affect Shareholders under Subsection B. Impacts to Statements of Financial Position from the Transaction)

6. Decrease Existing Shareholders’ burden The Connected Transaction will relief burden of the Company’ s existing shareholders from additional fund needs of the Company. Nonetheless, the Allocation and Offering of the Company’ s Newly Issued Shares for repaying the net trade debt under the Debt to Equity Conversion Scheme is the capital increase to Specific Investors ( Private Placement) will affect the existing shareholders in terms of Price Dilution, Control Dilution, and Earnings per Share Dilution.

7. Sufficient Fund Raising and Timeliness Under the Connected Transaction, the Company will allocate and offer the Company’s newly issued ordinary shares to repay its net trade debt under the Debt to Equity Conversion Scheme. Consequently, the Company will know exact amount of the debt reduction in an expected time period which can help the management to be able to plan for solving next problems better. The capital increase by other approaches may not help the Company to raise funds according to its plan for the usage of funds and/ or sufficient amount as needed which will affect the Company’ s operation and financial position. When issuing and offering newly issued ordinary shares to general investors ( Public Offering) , it has procedures and requires time for the offering, thus, it takes time for the Company to raise the fund and may not meet the time of fund needed. Moreover, the share issuance and offering to existing shareholders in respect to their shareholding (Rights Offering) has a limitation of the uncertainty of the fund amount received because the Company may not receive support from its existing shareholders to subscript the Company’ s newly issued ordinary shares due to its current unfavourable performance from stagnant economy condition. In addition, the capital increase is a large portion of capital increase, hence, there is a high chance that the existing shareholders may not exercise their right in full which result that the Company cannot raise fund as required.


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Cons of the Transactions 1. Effects to Shareholders

After the Connected Transaction, the existing shareholders will be affected by the reduction of the share price ( Price Dilution) equivalent to 24. 00 percent of the holding portion, the dilution effect on the shareholding ratio (Control Dilution) equivalent to 8.52 percent and the dilution effect on the earnings per share (Earnings per Share Dilution) equivalent to 24.00 percent, theoretically.

2. The Company will not receive proceed from the capital increase Because the Connected Transaction is the allocation and offering of the Company’ s newly issued ordinary shares under the Debt to Equity Conversion Scheme, the Company, then, will not receive new funding from such capital increase. However, the debt to equity conversion will reduce the Company’s debt and, after the transaction, the Company will have a right to receive additional financial support from the SSG Group .

3. Increase the Company’s Interest Rate from Borrowing After the Connected Transaction, the Company will have a right to receive additional financial support from the SSG Group for capital expenditure, working capital, and repayment other debts of the Company. However, the loans from the SSG Group have the interest rate of 12 percent per year which is higher than current interest rates from common financial institutions. In general, this is due to the Company experiences continuely operating loss from its business operation and has low level of cashflow from operating activities compared to the total liabilities according to the summary of Company’s financial statements. Such situation limited the Company’s ability to find sources of funds from common financial institutions.

4. Accounting Loss occurred After the Connected Transaction, the Company may suffer from an accounting loss because recognition of the difference between the fair value of the shares and the offering price under the Debt to Equity Conversion Scheme which will be recognized as an expense the debt restructuring according to the related accounting standard. The recognition of the item may incur more net accounting loss in its statement of comprehensive income. ( Please see additional details in Section 2. 1. 6 Other Related Information may affect Shareholders under Subsection B. Impacts to Statements of Financial Position from the Transaction)

5. Transaction is a connected transaction Although, presently, the SSG Group has no relationship with the Company, management, controlling person, or major shareholder of the Company and the Company has no management, controlling person, or major shareholders in the SSG Group, but after the Connected Transaction, the SSG Group will become a major shareholder of the Company, which will directly hold 24 percent of the total issued shares of the Company and indirectly hold 18.97 percent of the total issued shares of the Company through GSTEL (after registration of the Company’s paid-up capital)2. Therefore, the transaction is deemed to be a connected transaction.


of rights for the warrants of the Company based on the assumption that the warrants are exercised in ful l, ACO I will become a majority shareholder of the Company with a direct shareholding of 17.84 percent and an indirect shareholding of 22.48 of the total issued shares of the Company.


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6. Conflict of Interest After the Connected Transaction, the SSG Group will be a major shareholder of the Company and The SSG Group is a group of juristic persons consisting of investment funds with proficiency in investing in companies with financial problems and distressed assets and a strong expertise in debt management and business turnarounds. Since the SSG Group is a fund and has many investments, it may invest in other companies that have businesses which conflict with the Company’ s business or it may invest in a company that may have conflict of interest with the Company in the future. Currently, the SSG Group has no transaction which has a conflict of interest with the Company.

Risk Factors 1. Approval of the GJS Shareholder Meeting to enter the Connected Transaction and waiver from the

requirement to make a tender offer for all securities of the business by virtue of the resolution of the shareholders' meeting (Whitewash) An approval from the GJS Shareholder Meeting is one of the conditions before entering into the Connected Transaction together with the waiver from the requirement to make a tender offer for all securities of the business by virtue of the resolution of the shareholders' meeting (Whitewash). If the Company’s Shareholder Meeting does not approve the Connected Transaction or does not approve the waiver from the requirement to make a tender offer for all securities of the business by virtue of the resolution of the shareholders' meeting ( Whitewash) , the Company will not be able to convert debt to equity and will not receive any additional financial support from the SSG Group.

2. Risk from not receiving dividend Since the Credit Agreement has conditions that may affect the right of shareholders to receive dividend such as the Company must receive a letter of consent from Link Capital I before any dividend payment which might diminish right to receive dividend of the Company’ s shareholders. The condition is a general commercial term that companies might limit their dividend payment in loan agreement with commercial banks.

3. Risk from changes of the Company’s policy After the Connected Transaction, the SSG Group will be a major shareholder of the Company and have a right to nominate directors in GJS more than half of the total seats. Thus, it might affect the Company’ s policy in the future.

4. Risk from future takeover Because the SSG Group is a fund with investment period of approximately 5 – 7 years and when the investment period ends or the SSG Group can earn fair return which meets the fund’s policy, the SSG Group may sell entire or some shares of the Company to other investors. Nonetheless, if the SSG Group sell the Company’ s shares entirely or in part to a group of investors more than 25. 00 percent, the new investors obliges to make a tender offer for all securities of the business by virtue of the resolution of the shareholders' meeting ( Whitewash) , which gives the Company’ s shareholders an opportunity to consider together including the consideration to continue investing in the Company.


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Summary of the Independent Financial Advisor’s Overall Opinions Based on the fair value of the Transaction and the benefits, cons and risk factors of the Transaction, the Independent Financial Advisor has the opinion that the Company’ s shareholders should approve the Connected Transaction because the conversion price under the Debt to Equity Conversion Scheme, approved by the Company’ s Board of Directors on July 14, 2017, of THB 0.34 per share is in the fair value range evaluated by the Independent Financial Advisor of approximately THB 0.17 – 0.35 per share. Therefore, the Independent Financial Advisor deems that it is an appropriate price considering effects, pros, and cons incurred from the Transaction.

If the Company Shareholder Meeting approves the Connected Transaction, the Company may have the risk from changes of the Company’ s policy because after the Connected Transaction, the SSG Group will become a major shareholder of the Company and have a right to nominate directors in GJS more than half of the total seats . As the result, it might affect the Company’ s policy in the future. In addition, the Company and the SSG Group may have inter- transactions in the future and the Company should be careful on rational, appropriateness of price, and fair condition before entering those transactions.

Moreover, the financial assistance from Link Capital I, a company in the SSG Group, has interest rate of 12% per year which is higher than current normal interest rates from financial institutions because the Company experiences its operating loss from its business operation and has low level of cash flow from operating activities compared to the total liabilities according to the summary of Company’ s financial statements. Such situation limited the Company’s ability to find sources of funds from financial institutions. Thus, the Independent Financial Advisor has the opinion that if the Company can mitigate the limitation of its ability to find funding, the Company should refinance or find other sources of fund that have lower interest rate in the future.

Nonetheless, the Independent Financial Advisor believes that the SSG Group can convey the Company’s operation to earn better long- term profit. SSG Group, as the Company’ s major shareholders, has experiences to solve the Company’ s financial and high debt level problems. In addition, SSG Group has ability to give financial supports and business advices to the Company in the future. In conclusion, based on benefits, cons, risk factors, and other impacts with positive and negative influences, there is no crucial evidence to alter the Independent Financial Advisor’s opinion to other views from the price aspect.

However, the final decision whether to approve the Transaction rests with the Company’ s Board of Directors and shareholders. The Board of Directors and the shareholders can consider the opinion provided in the Independent Financial Advisor’s report as a basis for making your decision. Details of our study and opinion are as follows:


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Part 1 Connected Transaction


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1. Characteristics, Type, and Size of the Transaction 1.1 Date of the Transaction

The Company will allocate and offer the Company’ s newly issued ordinary shares under the Debt to Equity Conversion Scheme after obtaining an approval from the Company’ s Extraordinary General Meeting of Shareholders No. 1/ 2560 which will be held on August 30, 2017 and fulfilling all of the conditions under the Credit Agreement stated in the Section 1.7 Conditions of the Transaction. Moreover, regarding to the financial support in the Credit Agreement, with credit amount of USD 71,000,000, or equivalent to THB 2,450,154,777.78, the Company has drawn down some amount to repay trade debt to ACO I (please see details in the Section 2.1.3 Debt Restructuring Plan of the Company) and will have a right to drawdown additional loans for capital expenditure, working capital, and other debt repayments of the Company according to the Link Capital I approval when it can fulfill all conditions in the Credit Agreement.

1.2 Relevant Parties Issuer and offeror of shares : The Company Allotee : ACO I Relationship between the parties At the moment, ACO I does not have any relationship with the Company, its executives, controlling persons, or majority shareholders, and the Company shares no executives, controlling persons, or majority shareholders with ACO I.

Nevertheless, after the Allocation and Offering of the Newly Issued Ordinary Shares of the Company under the Debt to Equity Conversion Scheme, ACO I will become a majority shareholder of the Company with a direct shareholding of 24 percent of the total issued shares of the Company and indirect shareholding of 18.97 percent of the total issued shares of the Company through GSTEL (after registration of the Company’s paid-up capital)3, will nominate new directors to hold more than half of the board seat, and will appoint executives to hold key managerial positions, including the Chief Executive Officer (CEO) of the Company.




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2. SSG III is a Cayman Limited Partnership and is a collective Investment Fund which has capital commitments from the external investors who are limited partners (98.36 percent) and SSG GP (1.64 percent) . SSG GP is the general partner who has operational control over SSG III whereas the limited partners are essentially financial investors in SSG III who have no involvement with the operations of SSG III and do not have any relationship with the Company which would led to them being considered as connected persons of the Company . As of the date of this information memorandum, limited partners mainly comprise investors who are pension funds, sovereign wealth funds, family offices, insurance companies, endowment funds, and fund of funds. Specific details of the limited partners cannot be disclosed to public as they are prohibited under confidentiality agreements.

3. Link Capital I and ACO I are private limited companies set up as special purpose vehicles for investments by SSG III. The SSG Group has decided to have Link Capital I make investments as a secured creditor and have ACO I make investments as an unsecured creditor for ease of management and investment segregation . Moreover, the SSG Group’s investments do not have any conflict of interest with the Company and GSTEL.


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KG

ACO I Company Name Asia Credit Opportunities I (Mauritius) Limited Registered Office Globefin Management Services Ltd. , 1st Floor Anglo- Mauritius House,

Intendance Street, Port Louis, Mauritius Incorporated under the Laws of

The Republic of Mauritius

Register Date April 22, 2016 Nature of Business Special Purpose Vehicle (SPV) for investment of the SSG Group (investment

as unsecured debtor) Registered Capital USD 3,527,969 Par Value USD 1 per share Shareholding Structure Kendrick Global Limited directly holds 100 percent5 Directors 1. Roshan Nathoo

2. Vishwanand Nursimloo 3. Ranjan Lath

Link Capital I Company Name Link Capital I (Mauritius) Limited Registered Office Globefin Management Services Ltd. , 1st Floor Anglo- Mauritius House,

Intendance Street, Port Louis, Mauritius Incorporated under the Laws of The Republic of Mauritius Register Date June 29, 2016 Nature of Business Special Purpose Vehicle (SPV) for investment of the SSG Group (investment

as unsecured debtor) Registered Capital USD 20,501,000 Par Value USD 1 per share Shareholding Structure Kendrick Global Limited owns directly of 100%6 Directors 1. Roshan Nathoo


4 Please see Shareholding Structure of the SSG Group 5 Please see Shareholding Structure of the SSG Group 6 Please see Shareholding Structure of the SSG Group

Company Name Kendrick Global Limited Registered Office P. O. Box 957, Offshore Incorporation Centre, Road Town, Tortola, British

Virgin Islands Incorporated under the Laws of

The British Virgin Islands

Register Date June 28, 2016 Nature of Business Investment of the SSG Group Registered Capital USD 100 Par Value USD 1 per share Shareholding Structure SSG III directly holds 100 percent4 Directors 1. Vishwanand Nursimloo

2. Frank Bernard Balderamos 3. Jeffrey Ishmael Andre Goddard


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1.3 General Characteristics and Size of the Transaction The Company will allocate and offer not more than 3,343,000,000 newly issued ordinary shares of the Company, at the par value of THB 6 . 9 0 per share, to ACO I as repayment of the Net Trade Debt, in the amount of USD 32,934,250, or equivalent to THB 1,136,535,345.40, under the Debt to Equity Conversion Scheme. The Company will fix the conversion price at THB 0.3400 per share, aggregating THB 1,136,535,345.40. Such conversion price is 35.50 percent lower than the market price and, as a result, such offering of the newly issued ordinary shares of the Company is an offering of shares with a discount of more than 10 percent of the market price pursuant to the Tor Chor. 72/2558 Notification. In this respect, the market price is based on the weighted average price of the Company’ s shares traded for 7 consecutive days prior to the date on which the Board of Directors resolved to propose that the Extraordinary General Meeting of Shareholders No. 1/2017 approve the Allocation and Offering of the Newly Issued Ordinary Shares of the Company under the Debt to Equity Conversion Scheme, i . e. from July 4, 2017 to July 13, 2017, which equals to THB 0. 5272 per share ( information from SETSMART at www.setsmart.com of the SET).

In this regard, the Allocation and Offering of the Newly Issued Ordinary Shares of the Company under the Debt to Equity Conversion Scheme is considered as a connected transaction under the Connected Transaction Notifications since after the acquisition of the said newly issued ordinary shares, ACO I will directly hold 2 4 percent of the total issued shares of the Company and indirectly hold 1 8 . 9 7 percent of the total issued shares of the Company through GSTEL (after registration of the Company’s paid-up capital)7, will nominate new directors to hold more than half of the board seat, and will appoint executives to hold key managerial positions, including the Chief Executive Officer (CEO) of the Company. As a result, the Allocation and Offering of the Newly Issued Ordinary Shares of the Company under the Debt to Equity Conversion Scheme is a transaction with a person who will become a controlling person of the Company and, therefore, constitutes a connected transaction of the Company.

Moreover, the Allocation and Offering of the Newly Issued Ordinary Shares of the Company under the Debt to Equity Conversion Scheme will result in ACO I being required to make a tender offer for all securities of the Company as prescribed in the Securities and Exchange Act B.E. 2535 (as amended) and the Notification of the Capital Market Supervisory Board No. Tor Chor. 1 2 / 2 5 5 4 Re: Rules, Conditions and Procedures for the Acquisition of Securities for Business Takeover (as amended) . However, ACO I advised the Company that it did not wish to make a tender offer for all securities of the Company and that its wished to apply for a waiver from the requirement to make a tender offer for all securities of the business by virtue of the resolution of the shareholders' meeting of the Company ( Whitewash) in accordance with the Notification of the Office of the Securities and Exchange Commission No. Sor Chor 36/2546 Re: Rules for the Application for a Waiver from the Requirement to Make a Tender Offer for All Securities of the Business by Virtue of the Resolution of the Shareholders' Meeting of the Business ( the “ Sor Chor 3 6 / 2 5 4 6 Notification” ) . ( Please see details in the Section 1. 1 of Information Memorandum concerning the Offering of the Newly Issued Ordinary Shares of G J Steel Public Company Limited to 1) Existing Shareholders respected to shareholding portion and 2) Specific Investors in www.set.or.th)




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Connected Transaction Size Calculation The Allocation and Offering of the Newly Issued Ordinary Shares of the Company under the Debt to Equity Conversion Scheme will be considered as an assets or service related transaction with the transaction size of 8.81 percent of the net tangible assets ( NTA) of the Company as at March 3 1 , 2 0 1 7 , which is higher than THB 2 0 million or 3 . 0 0 percent of the NTA of the Company pursuant to the Connected Transaction Notifications. As a result, the Company is required to disclose information on the Connected Transaction of the Company to the SET under the Connected Transaction Notifications, obtain approval for the Connected Transaction from the shareholders’ meeting of the Company with votes of not less than three- fourths of the total votes of the shareholders attending the meeting and having the right to vote, excluding shareholders having interests, and appoint an independent financial advisor to provide an opinion on the Connected Transaction of the Company and submit such opinion to the SEC, the SET, and the shareholders of the Company.

In this regard, the net tangible assets (NTA) of the Company based on the consolidated financial statements of the Company as at March 31, 2017 are as follows:

Financial Information of the Company Amount (THB million) Total Assets 17,910.08 Less: Intangible Assets 7.39 Less: Total Liabilities 5,000.54 Less: Non-controlling Interests 0 Net Tangible Assets (NTA) 12,902.14


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1.4 Total Value of Consideration, Payment Terms, and Basis used to determine Value of Consideration The Company wishes to repay the Net Trade Debt of USD 32,934,250 or equivalent to THB 1,136,535,345.40, by issuing newly issued ordinary shares under the Debt to Equity Conversion Scheme. In this regard, the total value of consideration for the Allocation and Offering of the Newly Issued Ordinary Shares of the Company under the Debt to Equity Conversion Scheme is an issuance of not more than 3,343,000 ,000 shares, at the conversion price of THB 0.3400 per share, aggregating THB 1,136,535,345.40. Such conversion price is 35.50 percent lower than the market price and is as a result of the negotiation and agreement between the Company and ACO I based on the average closing price of the Company’s shares traded on the SET from May 2 to May 26, 2017 (equivalent to THB 0 . 3 2 6 7 per share) , taking into consideration the benefit that the Company will receive from the partial Trade Debt reduction ( i.e. a haircut) by waiver of the outstanding interest of USD 2 ,995 ,462 , or equivalent to THB 103,371,063.82.

Remark : Market Price is referred from the weighted average of the Company’ s shares in the Stock Exchange 7 business days retrospectively before the Board of Directors of the Company approved to propose the agenda to the Extraordinary General Meeting of the Company’s Shareholders No. 1/2017 to approve the Company to issue and offer newly issued ordinary shares under the Debt to Equity Conversion Scheme. The period is between July 4, 2017 to July 13, 2017 and the price is THB 0.5272 per share (Information from www.setsmart.com of the SET)

1.5 List of Connected Persons and Relationship with the Company

At the moment, ACO I does not have any relationship with the Company, its executives, controlling persons, or majority shareholders, and the Company shares no executives, controlling persons, or majority shareholders with ACO I. Nevertheless, after the Allocation and Offering of the Newly Issued Ordinary Shares of the Company under the Debt to Equity Conversion Scheme, ACO I will directly hold 24 percent of the total issued shares of the Company and indirectly hold 18.97 percent of the total issued shares of the Company through GSTEL (after registration of the Company’ s paid- up capital) 8, will nominate new directors to hold more than half of the board seat, and will appoint executives to hold key managerial positions, including the Chief Executive Officer ( CEO) of the Company. As a result, the Allocation and Offering of the Newly Issued Ordinary Shares of the Company under the Debt to Equity Conversion Scheme is a transaction with a person who will become a controlling person of the Company and, therefore, is considered as a connected transaction of the Company.




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A list of the expected majority shareholders of the Company after the Allocation and Offering of the Newly Issued Ordinary Shares of the Company under the Debt to Equity Conversion Scheme is as follows:

Details from the Share Register of

the Company as at the Book Closing Date on July 11, 2017

After the Capital Increase9

No. Name Amount Percentage Amount Percentage 1. ACO I 0 0.00 3,343,000,000(2) 24.00 2. GSTEL 2,122,427,209(1) 20.05 2,122,427,209(1) 15.24 3. Nomura Singapore Limited-

Customer Segregated Account 1,086,456,038 10.26 1,086,456,038 7.80

4. Mrs. Jarunee Chinwongvorakul 567,800,000 5.36 567,800,000 4.08 5. Quam Securities Company Limited

A/C Client 523,768,667 4.95 523,768,667 3.76

6. GS Security Holding Company Limited

520,000,000 4.91 520,000,000 3.73

7. Superior Overseas (Thailand) Company Limited

412,500,000 3.90 412,500,000 2.96

8. Thai NVDR Company Limited 187,951,907 1.78 187,951,907 1.35 9. Mr. Suraphan Tatiyamaneekul 187,521,600 1.77 187,521,600 1.35

10. Mr.Somchai Padpai 158,000,000 1.49 158,000,000 1.13 11. The Hongkong and Shanghai

Banking Corporation Limited, Singapore Branch Mr. Viroj Ungpaiboon

140,000,000 1.32 140,000,000 1.01

12. Minority shareholders 4,678,952,796 44.20 4,678,952,796 33.59 Total 10,585,378,217 100.00 13,928,129,233 100.00

Remark : (1) GSTEL already sold 22,000,000 shares with an option to repurchase such shares to a third -party where the ownership over such shares was already transferred to the purchaser. However, the purchaser has not changed the shareholder name with the registrar of the Company, thus, GSTEL holds the Company’s shares of 2,100,427,209 shares.

(2) Number of shares from the conversion of the Net Trade Debt of USD 32,934,250. 00, or equivalent to THB 1,136,535,345.40, to equity, at the price of THB 0.3400 per share, which will result in ACO I holding 24 percent of the shares.

9 Only for the Company’ s capital increase from the Allocation and Offering of the Newly Issued Ordinary Shares of the Company under

the Debt to Equity Conversion Scheme.


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1.6 Scope Characteristics of Conflict of Interest Directors having Conflict of Interest in the Transaction Since the Transaction is related to the debt restructuring of GSTEL, therefore, the following directors, who are GSTEL’s representatives, are considered as the directors having conflict of interest : (1) Mr. Yanyong Kurovat (2) Mr. Ryuzo Ogino (3) Ms. Soontareeya Wongsirikul (4) Mr. Somchai Leeswadtrakul (5) Mrs. Churairat Panyarachun In this regard, the said directors having conflict of interest did not attend and vote in the Board of Directors’ meeting which approved the Transaction.

Shareholders having Conflict of Interest in the Transaction Since the Transaction is related to the debt restructuring of GSTEL, GSTEL, with its shareholding of 2,122,427,209 shares of the Company, or equivalent to 20.05 percent of the total issued shares of the Company, and GS Security Holding Company Limited, a subsidiary of GSTEL, with its shareholding of 520,000,000 shares, or equivalent to 4 . 9 1 percent of the total issued shares of the Company, are considered as shareholders having conflict of interest in the Transaction and will not be able to vote at the shareholders’ meeting of the Company. 10

1.7 Conditions of the Transaction Apart from the conditions which the Company must fulfill pursuant to the Connected Transaction Notifications as described above, the allocation and offering of the newly issued ordinary shares of the Company to ACO I is also subject to the conditions of the offering of new shares to specific investors (Private Placement) under the Tor Chor. 72/2558 Notification, as well as the conditions of the application for a waiver from the requirement to make a tender offer for all securities of the business by virtue of the resolution of the shareholders' meeting (Whitewash) under the Sor Chor. 3 6 / 2 5 4 6 Notification. Therefore, the Company is required to disclose information on the transaction to the SET and proceed as follows:

(1) obtain approval from the shareholders’ meeting of the Company for the connected transaction and the waiver from the requirement to make a tender offer for all securities of the business by virtue of the resolution of the shareholders' meeting ( Whitewash) with votes of not less than three- fourths of the total votes of the shareholders attending the meeting and having the right to vote, excluding shareholders having interests;

(2) obtain approval from the shareholders’ meeting of the Company with votes of not less than three-fourths of the total votes of the shareholders attending the meeting and having the right to vote, excluding shareholders having interests relating to the offering of the newly issued ordinary shares to a specific investor ( Private Placement) at an offering price with a discount of more than 1 0 percent of the market price without any objection on the proposed offering price by the shareholders with an aggregate shareholding of 1 0 percent of the total votes of the shareholders attending such meeting and having the right to vote;

10 Information from the Share Register of the Company as at the Book Closing Date on July 11, 2017


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(3) obtain permission for the offering of the newly issued ordinary shares to a specific investor ( Private Placement) from the SEC before allocating and offering the newly issued ordinary shares of the Company to ACO I;

(4) file an application with the SET to list the newly issued ordinary shares as securities in the SET;

(5) obtain resignation letters from 4 directors of the Company who are currently in office;

(6) arrange for a Board of Directors’ meeting to approve the appointment of 2 directors (including the directors to be nominated by ACO I) and the amendment of the authorized signatories of the Company;

(7) receive consent or waiver from the Company’s creditors for the Allocation and Offering of the Newly Issued Ordinary Shares of the Company under the Debt to Equity Conversion Scheme in Section 1. 3 General Characteristics and Size of the Transaction in case such undertaking causes or may cause the Company to be in breach of an agreement.

Moreover, for the financial support, the Company will be entitled to draw the 2nd Loan Portion to utilize as capital expenditure, as working capital, and for other debt repayments of the Company as approved by Link Capital I once all of the conditions under the Credit Agreement have been fulfilled, including the following:

(A) the transfers of the debt that ACO I purchased from the previous trade creditors of the Company in Section 2.1.3 Debt Restructuring Plan of the Company have been completed

(B) the debt restructuring is completed within the 15- month period following the date of the 1st Loan Portion utilization (the Company utilized the 1st Loan Portion on February 2, 2017);

(C) Link Capital I has completed its due diligence so as to determine the amount of capital expenditure and working capital necessary to increase the Company’s production rate up to 100,000 tons per month and finds the result of the due diligence satisfactory;

(D) Link Capital I finds that the Company does not have an alternative financial source for capital expenditure and working capital necessary to increase its production rate up to 100,000 tons per month;

(E) the Company shall provide Link Capital I with evidence for capital expenditure and business operation for which the 2nd Loan Portion shall be utilized and Link Capital I finds such evidence satisfactory;

(F) The Company shall provide Link Capital I with the debt repayment terms to its creditors in relation to other debts incurred in the Company’s business operation and Link Capital I finds such terms satisfactory.

In addition, the Credit Agreement contains conditions that may affect the shareholders’ rights in receiving dividends as the Credit Agreement specifies that the Company must obtain prior written consent from Link Capital I before any dividend distribution.


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2. Rationales of the Transaction 2.1 Background and Objective of the Transaction 2.1.1 Background of the Transaction

After the Company proceeded debt to equity conversion to G Steel Public Company Limited group in 2008 that procedure was a result from the Company’ s restructuring by converting loan to the Company’ s ordinary share according to rehabilitation plan dated June 5, 2008 and the Central Bankruptcy Court has repealed the Company’s rehabilitation plan. In 2009, the Company still struggled a financial difficulty such as a consecutive operating loss and lack of financial liquidity because the Company could not seek any financing source from financial institution which led to insufficient fund to operate its business including the repayments of the large amount of outstanding trade debts. Despite the Company’s every effort to raise fund, the Company still could not solve the financial crisis situation provided that steel industries had been affected from 2008 financial crisis and the demand of hot roll coiled in the market decreased dramatically from such crisis. The Company made other efforts to seek out capable investors to help ameliorate the Company’s financial status, where in 2011, the Company entered into a joint investment agreement with ArcelorMittal Netherlands B.V. (“AM”); however, the undertaking was unsuccessful since the conditions precedent were not fulfilled. After the failure of the joint investment with AM, the Company constantly made efforts to restore its financial status, e. g. the issuance of newly issued ordinary shares to its creditors who participated in the debt restructuring program of the Company and its affiliates or other forms of fund raising, i. e. the allocation and offering of the warrants to purchase the ordinary shares to the shareholders of the Company pro rata to their shareholdings, so that the Company could have enough cash flow for its business operation. However, the Company still has suffered operating losses for the past several years as shown in the summary of the consolidated financial statements of the Company, which affected the financial liquidity and adequacy of cash flow used as working capital of the Company. Therefore, the Company had to cease its production for 8 months from the end of 2012 to the beginning of 2013. In March 2 0 1 4 , the Company resumed its production by utilization of the funds raised from the issuance of the newly issued ordinary shares to the existing shareholders pro rata to their shareholdings (Rights Offering), which enabled the Company to carry on its production continuously and repay some of its debt. However, the revenue from its business operation could not provide a solution to the large amount of outstanding debt owed to its numerous trade creditors. If the Company does not take an action to solve such problem, such debt will affect the financial status and the operating results of the Company. According to the information on the Company’ s financial position and operating results, the Company has a large amount of cumulative loss in the past 3 years with the current ratio of only 0.65, which is a result of the large amount of current liabilities being due in one year as calculated based on the consolidated financial statements of the Company as at March 31, 2017. ( Please see additional details in Part 2 Information of G J Steel Public Company Limited Section 4. 4 Key Financial Ratio) Furthermore, the Company has always suffered operating losses (excluding profit from the debt restructuring and other income) and has generated very low operating cash flow when compared with its total liabilities. As such, the reasons stated above are the limitations faced by the Company in securing debt financing from financial institutions for its operation.


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Information from the Consolidated Financial Statements of the Company for the year ended December 3 1 , 2 0 1 4 , 2015, and 2016; and for the three-month period ended March 31, 2017

(unit : THB million) Items 31 Mar 173 31 Dec 163 31 Dec 15 31 Dec 14

Revenue from sales1 3,526.02 11,669.47 12,260.38 14,513.00 Reversal of loss on devaluation of inventories - - 51.65 Net gain from exchange rate 141.73 53.61 - - Net gain from debt restructuring - 7.71 6.80 46.97 Net gain from haircut from creditor 622.31 - - - Other incomes 7.61 21.95 36.14 80.69 Total revenue 4,297.66 11,752.75 12,303.32 14,692.30 Costs and expenses 3,330.40 11,759.89 13,817.85 15,110.65 Operating profit (loss) 195.62 (90.42) (1,557.46) (597.65) Net profit (loss) 967.26 (7.14) (1,514.53) (418.35) Current assets 2,062.75 1,752.49 1,121.23 1,761.90 Total assets 17,910.08 17,812.87 18,000.02 19,832.86 Current liabilities 3,195.60 5,297.78 5,005.60 5,784.19 Total liabilities 5,000.54 5,870.59 6,050.87 6,369.18 Cumulative loss (20,628.85) (21,596.11) (21,589.24) (20,074.71) Shareholders’ equity 12,909.54 11,942.28 11,949.15 13,463.68 Cash flow from operating activities2 194.06 830.17 46.17 386.56 Current assets to current liabilities ratio 0.65 0.33 0.22 0.30 Debt to equity ratio 0.39 0.49 0.51 0.47

Remark : 1 Operating revenue excludes profit from the debt restructuring, profit from the debt reduction by the creditor, and other profits.

2 Information is retrieved from the cash flow statement. 3 The Company has not prepared any consolidated financial statements since December 31, 2016 as its subsidiary, i.e. GJS

Notes Holding Company Limited, already registered its liquidation with the Ministry of Commerce on April 18, 2016 in line with the resolution of the shareholders at the extraordinary general meeting of shareholders held on March 31, 2016. However, the financial statement for the fiscal year ended December 31, 2016, includes the operation of such subsidiary up until the liquidation date.

At the same time, the Company was contacted by the SSG Group, led by SSG CH, which expressed an intention to offer assistance in the debt restructuring of the Company and began conducting legal, accounting, and financial due diligence exercises, the results of which the SSG Group found to be satisfactory. Believing that it can restore the Company’s business, the SSG Group then started negotiations with the 4 major trade creditors of the Company and purchased debts from all of the said creditors at the beginning of 2017. The SSG Group is a group of juristic persons consisting of investment funds with proficiency in investing in companies with financial problems and distressed assets and a strong expertise in debt management and business turnarounds through raising funds from high net worth foreign investors. The current shareholding structure of the SSG Group is as follows:


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2. SSG III is a Cayman Limited Partnership and is a collective Investment Fund which has capital commitments from the external investors who are limited partners (98.36 percent) and SSG GP (1.64 percent) . SSG GP is the general partner who has operational control over SSG III whereas the limited partners are essentially financial investors in SSG III who have no involvement with the operations of SSG III and do not have any relationship with the Company which would led to them being considered as connected persons of the Company. As of the date of this information memorandum, limited partners mainly comprise investors who are pension funds, sovereign wealth funds, family offices, insurance companies, endowment funds, and fund of funds. Specific details of the limited partners cannot be disclosed to public as they are prohibited under confidentiality agreements.

3. Link Capital I and ACO I are private limited companies set up as special purpose vehicles for investments by SSG III . The SSG Group has decided to have Link Capital I make investments as a secured creditor and have ACO I make investments as an unsecured creditor for ease of management and investment segregation . Moreover, the SSG Group’s investments do not have any conflict of interest with the Company and GSTEL.


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Apart from the source of fund, the SSG Group can also approach experts in various industries when investing in a distressed asset. Therefore, the SSG Group can help turnaround the business both in terms of finance and operation so that the business can operate with efficiency, get through its financial problems, and achieve a business turnaround. Therefore, the restructure and turnaround of the Company’ s business entails a plan to restructure the debt and turnaround the business by making further investments in the Company for the improvement and maintenance of the material tools and equipment of the factories, which will enable the Company to continue its production during both off- peak and peak periods. In this regard, the increase in the production rate will bring the fixed cost per unit down and increase the Company’ s capacity to generate profits. The business turnaround plan will also include hiring Synergy Strategic Solutions Management DMCC ( “ Synergy” ) , a business and management advisory service provider whose clients include international steel manufacturers, having a team of experts with experience in the steel industry at the international level. Moreover, one of the Synergy team members, i.e. Sudhir Maheshwari, has successfully revived the financial status of several companies with a similar business to the Company in various countries and has work experience with ArcelorMittal engaging in the steel industry at the international level. The Synergy team will also help increase the production capacity and improve the internal management system, which will help lower the fixed cost per unit and result in efficient inventory management, as well as negotiating commercial agreements to increase the competitiveness of the products. Furthermore, the Synergy team will give consultation to the management of the Company and may hold the key positions in the Company as well. Synergy does not have any relationship with the SSG Group which will make it a connected person of the SSG Group. Besides the debt restructuring plan and the improvement of the Company’s operation, the SSG Group wishes also to support other areas of the Company’s operations, e.g. providing funding for investments and working capital, assisting in financial agreement negotiations with financial institutions, setting commercial policies and conditions suitable for the Company to help improve the production efficiency, and seeking new marketing channels, which will be of utmost benefit to the shareholders, trade partners, employees, and all stakeholders of the Company.

2.1.2 Objective of the Transaction The Company will allocate and offer not more than 3,343,000, 000 newly issued ordinary shares of the Company, at the par value of THB 6.90 per share and the Company sets the conversion price fixed at THB 0.3400 per share, aggregating not greater than THB 1,136,535, 345.40 to repay the Net Trade Debt in the amount of USD 32,934,250 under the Debt to Equity Conversion Scheme in order to reduce its massive accrued trade credit which currently affects the Company’s financial position and performance.


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2.1.3 Debt Restructuring Plan of the Company Under the MOU, which was executed on May 26, 2017, the SSG Group has the plan as followings :

1. ACO I purchased the debt from 4 previous trade creditors of the Company. In this regard, on February 10, 2017, the Company received a letter from ACO I to confirm the amount of transferred debt as at January 31, 2017, of USD 91,589,712, or equivalent to THB 3,160,689,724. 68 ( divided into principal of USD 58,392,108 or equivalent to THB 2,015,066,231.00, and interest of USD 33,197,604, or equivalent to THB 1,145,623,493.68) (the “Trade Debt”).

2. After the purchase of the Trade Debt in clause 1 ( above) , the Company entered into a credit agreement, dated January 22, 2017, (the “Credit Agreement”) with the loan amount of USD 71,000,000, or equivalent to THB 2,450,154,777.78, with Link Capital I, where on February 2, 2017, the Company utilized the first portion of the loan of USD 41,000,000, or equivalent to THB 1,414,878,111.11 (the “1st Loan Portion”), for the partial repayment of the Trade Debt to ACO I in the amount of USD 40 ,180 ,000 , or equivalent to THB 1,386,580,548.89, (divided into principal of USD 25,616,359, or equivalent to THB 884,000,625.26, and interest of USD 14,563,641, or equivalent to THB 502,579,923.63) (the “Partial Repayment”).

3. ACO I agreed to reduce a part of the Trade Debt ( i. e. a haircut) by waiver of the outstanding interest of USD 15,000,000, or equivalent to THB 517,638,333. 33. As a result, the Company’ s outstanding interest owed to ACO I is in the amount of USD 3,633,963, or equivalent to THB 125,405,236.71.

4. After the Partial Repayment in clause 2. and the Trade Debt reduction in clause 3., on April 26, 2017, the Company arranged for another pay down to ACO I in the amount of USD 480 ,000 , or equivalent to THB 16,564,426.67, resulting in the Company’s outstanding Trade Debt of USD 35,929,712, or equivalent to THB 1,239,906,411.22 (divided into principal of USD 32,345,883, or equivalent to THB 1,116,231,264.42, and interest of USD 3,583,892, or equivalent to THB 123,675,151.37).

5. Following further negotiations with ACO I, ACO I made an additional offer, i.e. prior to the implementation of the debt to equity conversion scheme, ACO I will make an additional Trade Debt reduction (i.e. a haircut) by waiver of the 1 st Interest Portion of USD 2 ,9 9 5 ,4 6 2 , or equivalent to THB 1 0 3 ,3 7 1 ,0 6 5 . 8 1 . The Company will have a remaining unpaid interest, which will be converted to equity on the day that the shareholders’ meeting approves the Allocation and Offering of the Newly Issued Ordinary Shares of the Company under the Debt to Equity Conversion Scheme of USD 5 8 8 ,3 6 7 , or equivalent to THB 20,304,075.20.

6. Under the MOU, the Company wishes to repay the outstanding Trade Debt of USD 3 2 ,3 4 5 ,8 8 3 , or equivalent to THB 1,116,231,270.20, in clause 4. above and the outstanding interest to be converted into equity of USD 588,367, or equivalent to THB 20,304,075.20, in clause 5. above Thus, the total amount of debt converted to equity is USD 32,934,250.00, or equivalent to THB 1,136,535,345.40 (collectively the “ Net Trade Debt” ) , by the Allocation and Offering of the Newly Issued Ordinary Shares of the Company under the Debt to Equity Conversion Scheme.

Under the debt restructuring plan of the Company, as well as the Allocation and Offering of the Newly Issued Ordinary Shares of the Company under the Debt to Equity Conversion Scheme, the Company will be able to clear a total debt of USD 3 5 , 9 2 9 , 7 1 2 ( divided into the outstanding Trade Debt to be converted into equity of USD 32,345,883 , the outstanding interest to be converted into equity of 588,367 , and the 1st Interest Portion to be waived of USD 2,995,462), or equivalent to THB 1,239,906,411.22. Furthermore, the Company will also obtain a waiver of the 2nd Interest Portion of USD 765,190, or equivalent to THB 26,406,111.75. By obtaining a waiver of the 1 st Interest Portion and 2 nd Interest Portion, the Company will be able to clear the relevant outstanding


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withholding tax of USD 663,644, or equivalent to THB 18,241,953.29, which the Company has to pay on behalf of the creditor11. In addition, the Company will have ACO I, a company in the SSG Group, as a majority shareholder, who is a capable investor having readily available funds as well as expertise in various industries and is also ready to offer funding to support the Company’s continuous operation in the future. และ

2.1.4 Details of the Assets The Company sets the price of the Company’ s newly issued ordinary shares at THB 0 . 3 4 0 0 per share for the newly issued ordinary shares of not more than 3 ,3 4 3 ,0 0 0 ,0 0 0 shares, total value of not greater than THB 1 ,1 3 6 ,6 2 0 ,0 0 0 . 0 0 in order to repay the net trade debt of USD 3 2 ,9 3 4 ,2 5 0 . 0 0 or equivalent to THB 1 ,1 3 6 ,5 3 5 ,3 4 5 . 4 0 under the Debt to Equity Conversion Scheme. In this regard, the Company’ s criteria for determining the offering price are based on the negotiation and agreement between the 2 parties and the price based on the average closing price of the Company’ s shares traded on the SET from May 2 to May 2 6 , 2 0 1 7 (equivalent to THB 0.3267 per share). The said price was determined from the benefits that the Company will receive from the partial trade debt reduction (Haircut) by waiving of unpaid interest portion of USD 2,995,462, or equivalent to THB 103,371,065.81.

In the case that the conversion price is lower than 90 percent of the market price during the period of 7-15 business days prior to the date of the debt to equity conversion, ACO I will not sell the newly issued ordinary shares within 1 year from the date on which the newly issued ordinary shares of the Company are first traded on the SET (Silent Period). Nonetheless, ACO I may sell not more than 25 percent of the lock-up said newly issued ordinary shares after the newly issued ordinary shares of the Company have been traded on the SET for 6 months.

2.1.5 Relevant Persons and Relationship At the moment, ACO I does not have any relationship with the Company, its executives, controlling persons, or majority shareholders, and the Company shares no executives, controlling persons, or majority shareholders with ACO I.

Nevertheless, after the Allocation and Offering of the Newly Issued Ordinary Shares of the Company under the Debt to Equity Conversion Scheme, ACO I will directly hold 24 percent of the total issued shares of the Company and indirectly hold 18.97 percent of the total issued shares of the Company through GSTEL (after registration of the Company’s paid-up capital will nominate new directors to hold more than half of the board seat) 12, and will appoint executives to hold key managerial positions, including the Chief Executive Officer ( CEO) of the Company. As a result, the Allocation and Offering of the Newly Issued Ordinary Shares of the Company under the Debt to Equity Conversion Scheme is a transaction with a person who will become a controlling person of the Company and, therefore, is considered as a connected transaction of the Company.

11 Pursuant to the agreement with its foreign trade creditors, if the Company is in default of its debt, it must pay a default interest at the rate

of approximately 7.5 percent and be liable for withholding tax at the rate of 15 percent on the default interest on behalf of the creditors. 12 Including the registration of the Company's paid-up capital. As a result of the allotment of new ordinary shares to accommodate the

adjustment of the rights of the Company's warrants, under the assumption that all of the warrants are exercised, ACO I will become the major shareholder of the Company. The Company holds 17.84% of the Company's paid-up shares directly. And indirectly through GSTEL 22.48% of the total shares sold of the Company.


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A list of the expected majority shareholders of the Company after the Allocation and Offering of the Newly Issued Ordinary Shares of the Company under the Debt to Equity Conversion Scheme is as follows:

Details from the Share Register of

the Company as at the Book Closing Date on July 11, 2017

After the Capital Increase13

No. Name Amount Percentage Amount Percentage 1. ACO I 0 0.00 3,343,000,000(2) 24.00 2. GSTEL 2,122,427,209(1) 20.05 2,122,427,209(1) 15.24 3. Nomura Singapore Limited-

Customer Segregated Account 1,086,456,038 10.26 1,086,456,038 7.80

4. Mrs. Jarunee Chinwongvorakul 567,800,000 5.36 567,800,000 4.08 5. Quam Securities Company Limited

A/C Client 523,768,667 4.95 523,768,667 3.76

6. GS Security Holding Company Limited

520,000,000 4.91 520,000,000 3.73

7. Superior Overseas (Thailand) Company Limited

412,500,000 3.90 412,500,000 2.96

8. Thai NVDR Company Limited 187,951,907 1.78 187,951,907 1.35 9. Mr. Suraphan Tatiyamaneekul 187,521,600 1.77 187,521,600 1.35

10. Mr.Somchai Padpai 158,000,000 1.49 158,000,000 1.13 11. The Hongkong and Shanghai

Banking Corporation Limited, Singapore Branch

140,000,000 1.32 140,000,000 1.01

12. Minority shareholders 4,678,952,796 44.20 4,678,952,796 33.59 Total 10,585,378,217 100.00 13,928,129,233 100.00

Remark : (1) GSTEL already sold 22,000,000 shares with an option to repurchase such shares to a third -party where the ownership over such shares was already transferred to the purchaser. However, the purchaser has not changed the shareholder name with the registrar of the Company, thus, GSTEL holds the Company’s shares of 2,100,427,209 shares.

(2) Number of shares from the conversion of the Net Trade Debt of USD 32,934,250. 00, or equivalent to THB 1,136,535,345.40, to equity, at the price of THB 0.3400 per share, which will result in ACO I holding 24 percent of the shares.

13 Only for the Company’ s capital increase from the Allocation and Offering of the Newly Issued Ordinary Shares of the Company under

the Debt to Equity Conversion Scheme. However, the purchaser has not changed the shareholder name with the registrar of the Company, thus, GSTEL holds the Company’s shares of 2,100,427,209 shares.


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2.1.6 Other Related Information may affect Shareholders A. Information of the Company’s Warrants

Current, the Company has issued the warrants as follow : Before Adjustment of Rights After Adjustment of Rights Warrants GJS – W2 GJS – W3 GJS – W4 GJS – W2 GJS – W3 GJS – W4 Exercise Price (THB) @ Par THB 6.90

2.07 1.50 1.50 1.8936 1.3722 1.3722

Exercise Ratio (unit : shares)

1 : 0.363 1 : 0.40 1 : 0.40 1 : 0.40 1 : 0.44 1 : 0.44

Last exercise date 12 Dec 17 7 Feb 20 11 Feb 20 12 Dec 17 7 Feb 20 11 Feb 20

The Independent Financial Advisor has an opinion that the exercise prices of the GJS- W2, GJS- W3, and GJS- W4 warrants are presently greater than the market price ( Out of the money) . Thus, the holders of the GJS- W2, GJS- W3, and GJS- W4 warrants may choose to invest in the GJS ordinary shares rather than exercise the Company’ s warrants, which requires higher investment amount. Therefore, the Independent Financial Advisor believes that the effect occurred from the GJS- W2, GJS- W3, and GJS- W4 warrants has low possibility.

However, the Independent Financial Advisor analyses the impact from the issuance of the ordinary shares under the Debt to Equity Conversion Scheme to Specific Investors ( Private Placement) and the exercise of the warrants. Please see details in the Section 2.2 Effects may occur to Shareholders.

B. Impacts to the Statement of Financial Position from the Transaction According to the opinion of the auditor, the Debt to Equity Conversion Transaction is qualified under the condition in the accounting standard related to a debt restructuring. Under the agreement the Company made with the SSG Group, the debt to equity conversion value will be at fair price, which agreed by both parties (THB 0.34 per share), for the newly issued shares of 3,342,751,016 shares (par value of THB 6.9 per share) and the remaining debt amount with ACO I, after the haircut of the accrued interest of USD 32,345,883.17, and the remaining accrued interest of USD 588,366. 70. The impacts studied by the Independent Financial Advisor are referred to the Thai Accounting Standard No. 104, Accounting for Troubled Debt Restructuring, and it has results as follow:

(unit : THB) Debt to Equity Conversion Dr Cr

B/S : Debtor ACO I (USD 32,345,883.17) 1,116,230,551.49 B/S : Interest Debtor (USD 588,366.70) 20,304,064.12 B/S : Discount from ordinary share price 21,928,446,664.96 P&L : Loss from debt restructuring 729.83 P&L : Shareholders’ equity 23,064,982,010.40


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In the Thai Accounting Standard No. 104 Fair Value is an amount that a buyer and a seller agree to exchange assets under their knowledge and willingness for the exchange and both parties can negotiate freely without any relationship. In this case, it is THB 0.34 per share or the value of consideration for the Transaction. If the Company’s auditor changes the fair value for its accounting treatment, it might affect the loss from debt restructuring and the discount on the ordinary share price.

However, for the WHT of the interest converted from debt to equity, it has an obligation to pay to the Revenue Department because it perceives that the interest payment is made. Thus, it is not recognized as a part of (gain) loss from debt restructuring.

The interest occurred from the debt haircut before the debt restructuring will be adjusted as gain from the haircut in total amount ( including WHT obligation since it is perceived that tax obligation has not been incurred due to no actual payment)

Accounting items for the gain from debt haircut (unit : THB)

Gain from Debt Haircut Dr Cr

B/S : Interest Debtor 129,777,078.47 B/S : WHT Creditor 22,901,837.38 P&L : Gain from debt haircut 152,678,915.85

Note According to the information regarding the offering of newly issued ordinary shares of GJ Steel Public Company Limited to private placement, dated July 1 4 , 2 0 1 7 , the allocation and offering of new ordinary shares of GJ Steel Public Company Limited According to debt- to- equity conversion scheme, The loss on book value of Baht 625.66 million was due to the difference between the fair value of shares (Baht 0.5272 per share) and the offering price ( Baht 0 . 3 4 0 0 per share) . TAS 1 0 4 Accounting for Troubled Debt Restructuring And make the company There may be an increase in net accounting losses in the statement of comprehensive income. This is an initial calculation using the fair value of shares (Bt0.5272 per share) and the offering price (Bt0.334 per share). 3,342,751,016 shares, resulting in an accounting loss of Baht 625.66 million as disclosed in the Company's information.


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Impacts to the Statements of Financial Position

Q1 2017 (1)

Adjustment from the Debt to Equity

Conversion Transaction (2)

Adjustment from the Additional Financial Assistance

(THB million)

(USD million)

(THB million)

(THB million)

(USD million)

(THB million)

(THB million)

Assets

Total Current Assets 2,063 7 (0.49) (16.87) 2,046 5 30.00 1,035.30 3,081

Total Non-current Assets 15,847 - 15,847 - 15,847

Total Assets 17,910 17,893 30.00 1,035.30 18,929

Liabilities and Shareholders’ Equity - - -

Current Liabilities - - -

Trade Account Payable 624 - 624 - 624

Other payable and accrued expenses 766 - 766 - 766

Accrued Interest 123 - 123 123

Liabilities under the debt restructuring process 1,269 1 (32.93) (1,136.56) 132 - 132

Other Current Liabilities 414 2 (0.67) (23.21) 391 - 391

Total Current Assets 3,196 2,036 2,036

Total Non-current Assets 1,805 3 (4.24) (146.34) 1,659 6 30.00 1,035.30 2,694

Total Liabilities 5,001 (37.84) (1,306.08) 3,695 30.00 1,035.30 4,730

Total Shareholders’ Equity 12,910 4 37.35 1,289.21 14,199 - - 14,199

Current Ratio 0.65

1.00 1.51

Debt to Equity Ratio 0.39 0.26 0.33 Remark :

1. Principal and interest converted to equity is USD 32,345,883 + USD 588,367 = USD 32,934,250 2. Withholding tax of the 1st accrued interest waived (Interest Waived 1) and withholding tax of the 2nd accrued interest waived

(Interest Waived 2) = USD 663,644. Withholding tax of the interest as of April 26, 2017 = USD 672,492. 3. The 1st accrued interest waived (Interest Waived 1) of USD 2,995,462 and the 2nd accrued interest waived (Interest Waived 2) of

USD 765,190 USD, totaling USD 3,760,652, and the Principal and interest as of April 26, 2017 of USD 480,000 USD, total = USD 4,240,652.

4. Adjust the items in 1+2+3+ profit from the debt haircut of USD 4,424,296– loss from the debt restructuring of USD 21. 5. Additional Working Capital of USD 30,000,000. 6. Adjusted according to 5. 7. Pay debt of USD 480,000 + pay the withholding tax of principal repayment as of April 26, 2017 of USD 8,847, total of USD

488,847.


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If the shareholders approve the Transaction, the impacts to the Company’ s financial statements are as follows : Benefits to the financial statements from the Transaction If the shareholders approve the Transaction, the overall benefits will be : Benefit from the debt to equity conversion : Principal + Interest + = THB 1,136,534,615.61 Gain from the interest haircut + WHT of THB 152,678,915.85 in the profit and loss statement Total benefit from the Transaction of THB 1,289,213,531.47

Cons to the financial statements from the Transaction If the shareholders approve the Transaction, the overall cons will be : Discount from ordinary share price of THB 21,928,446,664.96 Loss from debt restructuring of THB 729.83 in the profit and loss statement Total cons from the Transaction of THB 21,928,447,394.79

Including the impacts to the Company’ s statement of financial position in ( 2) adjustments from the Debt to Equity Conversion Transaction : Total assets decrease from THB 17,910 million to THB 17,893 million Total liabilities decrease from THB 5,001 million to THB 3,695 million Total shareholders’ equity increase from THB 12,910 million to THB 14,199 million If the shareholders do not approve the Transaction, the impacts to the Company’s financial statements are as follow : Benefits to the financial statements If the shareholders do not approve the Transaction, the overall view will be : No discount from ordinary share price of THB 21,928,446,664.96 No loss from debt restructuring of THB 729.83 in the profit and loss statement No total cons from the Transaction of THB 21,928,447,394.79

Cons to the financial statements If the shareholders do not approve the Transaction, the overall view will be : No benefit from the debt to equity conversion : Principal + Interest + = THB 1,136,534,615.61 No gain from the interest haircut + WHT of THB 152,678,915.85 in the profit and loss statement No total benefit from the Transaction of THB 1,289,213,531.47

Including the impacts to the Company’s statement of financial position in (1) Q1 2017 No significant change from the financial statement in Q1 2017


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C. Comparison of the benefits that the Company earns from the Transaction Entering the Transaction, the Company will be able to reduce its debt obligation via the conversion of debt to equity which can decrease the Company’ s debt of USD 32,934,250. 00 or equivalent to THB 1,136,535,345.40. The debt reduction can be separated into the accrued trade receivable of USD 32,345,883 or equivalent to THB 1,116,231,264. 42 and the accrued interest of USD 588,367 or equivalent to THB 20,304,087.55. In addition, the Company will receive the 1st portion of the interest waiver of USD 2,995,462 and the 2nd portion of USD 765,190 together with the related withholding tax of USD 663,644. The interest waiver will be effective immediately if the Debt to Equity Conversion Transaction is approved by the shareholders’ meeting of GJS which will result to the reduction of the withholding tax. Total benefits that the Company gains from the debt reduction are USD 37,358,546 or equivalent to THB 1,289,214,378.

USD THB THB per share 1. Principal to be converted

from debt to equity 32,345,883 1,116,231,264 0.3339

2. Interest to be converted from debt to equity

588,367 20,304,087 0.0061

Total debt to be converted from debt to equity (1+2)

32,934,250 1,136,535,345 0.3400

3. Interest waiver 3,760,652 129,777,078 0.0388 4. Related withholding tax 663,644 22,901,837 0.0069

Total other benefits (3+4) 4,424,296 152,678,915 0.0457 Number of shares issued for the Transaction

3,342,751,016 shares

Total benefits to the Company (1+2+3+4)

37,358,546 1,289,214,260 0.3857

When comparing the total benefits that the Company receives from the Debt to Equity Conversion Transaction, the result is as follows :

Transaction Value from the Debt to

Equity Conversion

Total Benefits to the Company

Different (2-1)

Value per share 0.3400 0.3857 0.0457 Number of shares issued for the Transaction

3,342,751,016 shares

Total Value 1,136,535,345 1,289,214,260 152,678,915


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D. Summary of Shareholding Structure between the SSG Group and the Company’s group (GJS and GSTEL) The SSG Group is giving an assistance to the Company’ s group ( GJS and GSTEL) and the related transactions of each company are required an approval from the Extraordinary General Meeting of the Shareholders No. 1/2017 held on August 30, 2017 (GJS and GSTEL will have the shareholders’ meeting on the same day).

Nonetheless, the approval from the shareholders’ meeting of GJS and GSTEL has no linkage, for example, if the Extraordinary General Meeting of the Shareholders of GSTEL does not approve the Transaction but the Extraordinary General Meeting of the Shareholders of GJS approves the Transaction, the transactions between the SSG Group and GJS is still going.

Furthermore, the approval of the Extraordinary General Meeting of the Shareholders of GJS on Transaction includes an approval of the issuance and offering the Company’ s newly issued ordinary shares under the Debt to Equity Conversion Transaction and waiver from the requirement to make a tender offer for all securities of the business by virtue of the resolution of the shareholders' meeting of the Company (Whitewash) (Please see additional details in the Report of Opinion of the Independent Financial Advisor on the waiver from the requirement to make a tender offer for all securities of the business by virtue of the resolution of the shareholders' meeting of the Company ( Whitewash) ) to the SSG Group. However, the approvals of the issuance and offering the Company’s newly issued ordinary shares under the Debt to Equity Conversion Transaction and waiver from the requirement to make a tender offer for all securities of the business by virtue of the resolution of the shareholders' meeting of the Company (Whitewash) are linked conditions.

GSTEL disposed 100,000,000 ordinary shares in GJS prior to the date of the Board of Directors’ meeting on July 14, 2017, which was because GSTEL was in need of funds to repay due debts owed to financial institutions and trade creditors since it did not have sufficient fund for such debt repayment, GSTEL will be affected by a dilution in its shareholding in GJS, from its previous shareholding of 25.91 percent of the total issued shares to 24.96 percent of the total issued14. In case, all shareholders with an aggregate shareholding of 100 percent of the total issued shares attend a shareholders’ meeting, GSTEL will not be able to object to certain resolutions which requires a three- fourths ( or 75 percent) vote of the shareholders attending the meeting and having the right to vote. However, GSTEL will still have control over the Company and the Company will still remain GSTEL’s subsidiary since GSTEL’s representative will still hold the majority of the board seat.

Remark: GSTEL sold the ordinary shares in GJS of 100,000,000 shares during June 25, 2017 and July 13, 2017 in the Stock Exchange with the selling price range of approximately THB 0.50 – 0.60 per share.

14 Information as shown on the share register of the Company as at the book closing date on July 11, 2017.


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The Independent Financial Advisor has summarized shareholding structure between the SSG Group and the Company’ s group ( GJS and GSTEL) on the assumption that the Extraordinary General Meeting of the Shareholders of GSTEL and GJS approves all transactions with the SSG Group. The result is as follow :

Before entering the transactions with SSG

After entering the transactions with SSG regarding PP of GJS

and GSTEL

After entering the transactions with SSG regarding PP of GJS and GSTEL + RO of GSTEL

GSTEL owns GJS 20.05% + 4.91% totaling 24.96%

SSG Group owns GJS 24.00% + 15.24% + 3.73% totaling 42.97%

*SSG Group owns GJS 24.00% + 15.24% + 3.73% totaling 42.97%

Remark: * After entering the transactions with SSG regarding PP of GJS and GSTEL + RO of GSTEL, the SSG Group will own the shares in GSTEL from 76.09% to 67.97%. However, the SSG Group will still own the GSTEL shares more than 30% which gives the SSG Group, the existing shareholder, to have a significant control in GSTEL disregarded whether direct or indirect controls.

E. The issuance of the newly issued shares to the existing shareholders based on their shareholding proportion (RO : Right Offering) The SSG Group is entering the debt to equity conversion scheme and giving the financial assistance to GSTEL and GJS. According to the information from Information Memorandum concerning the Offering of the Newly Issued Ordinary Shares of G J Steel Public Company Limited, GSTEL will allocate the newly issued ordinary shares of GSTEL with the amount not exceed 3,425,090,482 shares at the par value of THB 5 per share to its existing shareholders based on their shareholding portion ( Rights Offering) with the ratio of 2 ordinary shares to 1 new ordinary share at the offering price of THB 0.19613 per share in order to reduce the effect from the price dilution for the GSTEL’s shareholders due to the transaction of GSTEL referred to the Information Memorandum concerning the Connected Transaction of G J Steel Public Company Limited. The price is determined from the negotiation between GSTEL and the SSG Group based on the average closing price of the Company’ s shares traded on the SET from May 2 to May 26, 2017 ( equivalent to THB 0. 3155 per share) . The share offering is the offering at a low price resulted from the negotiation between GSTEL and the SSG Group.

For GJS, due to the negotiation between the Company and the SSG Group and the MOU signed on May 26, 2017, the price is based on the average closing price of the Company’ s shares traded on the SET from May 2 to May 26, 2017 (equivalent to THB 0.3155 per share). The issuance of the ordinary shares under the Debt to Equity Conversion Scheme with the conversion price of THB 0. 3400 per share is higher than the market price during the period that the Company and the SSG Group had the agreement. Thus, the share issuance


37

under the Debt to Equity Conversion Scheme at the conversion price of THB 0.3400 per share will not affect the share price of GJS (Price Dilution). Therefore, the Company does not have a plan to issue the new share by the Right Offering to the Company’s existing shareholders.

The MOU signed between the Company and the SSG Group states that after the issuance of the new ordinary shares under the Debt to Equity Conversion Scheme of USD 32,934,250. 00, the SSG Group must receive the GJS’s share after the Transaction of approximately 24% of the issued and paid-up capital of the Company.

However, if the market price is based on the weighted average price of the Company’ s shares traded for 7 consecutive days prior to the date on which the Board of Directors resolved to propose that the Extraordinary General Meeting of Shareholders No. 1 / 2 0 1 7 approve the Allocation and Offering of the Newly Issued Ordinary Shares of the Company under the Debt to Equity Conversion Scheme, i.e. from July 4, 2017 to July 13, 2017, is equaled to THB 0.5272 per share ( information from SETSMART at www.setsmart.com of the SET).

The Independent Financial Advisor has the opinion that if comparing with the Company’s weighted average share price between July 4, 2017 and July 13, 2017, which equals to THB 0. 5272 per share, the conversion price at THB 0.34 per share will be 35.50% lower than the current market price. As the result, the existing shareholders will be affected by the price dilution.

Nonetheless, the Independent Financial Advisor deems that the offering price of the GJS shares based on the weighted average share price of THB 0. 5272 per share is the price which includes the expectation that the Company should be able to solve its current financial problems. (Please see additional details in the Section 3 Valuation under the Subsection 3 Historical Market Price Approach)

F. Summary of the background of the trade debts in the Transaction with the SSG Group The SSG Group purchased the debt from 4 previous trade creditors of the Company. In this regard, on February 10, 2017, the Company received a letter from the SSG Group to confirm the amount of transferred debt as at January 31, 2017, of USD 91,589,712, or equivalent to THB 3,160,689,724. 68 ( divided into principal of USD 58,392,108 or equivalent to THB 2,015,066,231. 00, and interest of USD 33,197,604, or equivalent to THB 1,145,623,493.68). Details are as follow :

Creditors Principal

(USD) Interest as of January

31, 2017 Total Amount

Duferco 2,128,411 1,518,438 3,646,849 Intergate 15,197,000 11,468,982 26,665,982 Stena 33,274,489 15,489,462 48,763,951 Stemcor 7,729,207 4,702,722 12,431,929

Total Amount 58,392,108 33,197,604 91,589,712

The above creditors are the Company’ s trade creditors and in 2013 the Company entered the debt restructuring agreement with those creditors by agreeing to extend the payment to start from March 31, 2014 to March 31, 2018. Later in 2014, the Company defaulted the first payment due on March 31, 2014 and the Company also has the interest from the debt default to the creditors at the rate of 5% per year from the default


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date. On January 31, 2017, the Company received the letter notifying about the transfer of the debt, which the Company owes those creditors, including other debt obligations under the previous agreement to a foreign company, namely the SSG Group.

G. Analysis of machine efficiency One of the conditions for receiving the additional financial assistance from Link Capital I is to increase the Company’ production rate to 100,000 tons per month. Based on the site visit to the Company’ s plant, the condition of the Company’ s machine and plant is relatively old but can still operate. Because of the Company’s limitation on insufficient working capital, the Company currently chooses its production period during the low electricity price period (Off Peak rate). The Company could only afford to run its production of approximately 60,000 tons per month. The rates on the time of usage (TOU : Time of Use Rate) are as follow :

TOU : Time of Use Rate Day Time Period Number of days

Number of hours

%

Peak Monday – Friday 09.00-22.00 น. 141.22 3,389 38.69

Off Peak

Monday – Friday 22.00-09.00 น 105.49 2,532

61.31

Saturday - Sunday Labor Day and National

Holiday (exclude substitution holiday and Royal Ploughing Day)

00.00-24.00 น. 118.29 2,839

Total 365 8,760 100.00

When comparing the Company’ s production rate of approximately 60,000 tons per month or equivalent to 60% of the Company’ s maximum capacity, it closes to the off peak period accounted as 61% of the time period of the electricity usage of a day. If the Company has sufficient working capital and can produce all day (Peak + Off Peak) or 100% of the time period of the electricity usage of a day, the Independent Financial Advisor has an opinion that the Company should be able to produce to nearly 100,000 per month.

Link Capital I has conducted the due diligence in order to confirm the capital expenditure and working capital required to increase the Company’ s production rate to 100,000 tons per month. It finds the satisfied result and has set the financial assistance amount of approximately USD 30,000,000 to the Company.


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H. Structure and List of the Boards of Directors before and after the Transaction Before request for the waiver After security acquisition in Section 115

Name Position Name Position Mr. Yanyong Kurovat Chairman Mr. Yanyong Kurovat Chairman Mr. Ryuzo Ogino Director/CEO Mr. Sudhir Maheshwari16 Director Ms. Soontareeya Wongsirikul

Director Mr. Andreas Rizal Vourloumis17 Director

Mr. Somchai Leeswadtrakul Director Mr. Richard Yee18 Director Mr. Komol Wong-Apai Director Mr. Tobias Damek19 Director Mrs. Churairat Panyarachun Director Ms. Methikan Chutipongsiri Director Assoc. Prof. Niputh Jitprasonk

Independent Director/ Chairman of Audit Committee

Mr. Somchai Leeswadtrakul Director

Assoc. Prof. Sukanya Tantanawat

Independent Director/Audit Committee Assoc. Prof. Niputh Jitprasonk Independent Director/ Chairman of Audit Committee

Mr. Michael Wyer Independent Director/Audit Committee Dr.Narumon Saardchom 20 Independent Director/Audit Committee

Assoc. Prof. Sukanya Tantanawat Independent Director Mr. Steve Stewart21 Independent Director/Audit

Committee

The Independent Financial Advisor has an opinion that the above change will be appropriate if the change of GJS’ s directors and organization structure is for the highest benefit for the Company’ s business and complied with the conditions under Public Companies Limited Act and other regulations. In addition, Sudhir Maheshwari has successfully revived financial status of several companies with a similar business to the Company in various countries and has work experience with ArcelorMittal engaging in the steel industry at the international level. ( Please see additional details in Section 2. 1. 6 Other Related Information may affect Shareholders under Subsector J. Information of Synergy Strategic Solutions Management DMCC)

However, after the Debt to Equity Conversion Transaction (Connected Transaction) and the waiver from the requirement to make a tender offer for all securities of the business, the SSG Group will a major shareholder of GJS and have a right to nominate directors in GJS more than half of the total seats. Thus, it might affect the Company’s policy in the future.

15 Number of directors will increase for 2 seats from 9 directors to 11 directors. 16 Newly appoint director 17 Newly appoint director 18 Director replacing the resigning directors 19 Director replacing the resigning directors 20 Director replacing the resigning directors 21 Director replacing the resigning directors


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I. Documents related to the Transaction Draft Share Purchase Agreement

Parties G J Steel Public Company Limited ( “ the Company” ) and Asia Credit Opportunities 1 ( Mauritius) Limited or the waiver requesting person as “Purchaser”

Share reservation and purchase

The Company agrees to issue and allocate the newly issued ordinary shares of 3,342,751,016 shares ( “ newly issued shares” ) to the purchaser by the debt to equity conversion with the conversion price of THB 0. 34 per share. The purchaser agrees to buy the newly issued shares and decrease some of the principal and interest from the unsecured creditors in the amount of USD 32,934,250 ( comprised of the principal amount of USD 32,345,883 and the accrued interest of THB 588,367) , which is the purchase price of the newly issued shares.1

Right to terminate the agreement

If any party does not comply with all condition precedents of the share purchase or fail conditions are not exempted by the other party before or on September 30, 2017 or if a party, who can fulfill the conditions, considers that the condition precedents cannot be able to fulfilled, the party that complies with all condition precedents has the right to terminate the agreement by notifying the other party, who cannot fulfill the conditions.

Condition Precedent • The Company can obtain resignation letters from the authorized signatories from its 4 current directors as stated in the agreement.

• The Company’ s shareholder meeting approves all matters related to its obligations under the agreement including but not limit to the following matters : ( 1 ) capital increase, ( 2 ) amendment the Company’ s memorandum of association, ( 3 ) allocation of newly issued shares ( 4) entrance of the Connected Transaction (5) debt to equity conversion (6) waiver from the requirement to make a tender offer for all securities and ( 7 ) increase of the number of directors of 2 seats more by the waiver requesting person. 2

• The Company’s Board of Directors’ meeting approves (1) appointment of the 4 new directors proposed by the waiver requesting person and ( 2) amendment of the authorized signatories of the Company3.

• No circumstance or situation which affect the Company severely according to the Share Purchase Agreement. 4

• The purchaser must obtain all permission or approval necessary for the acquisition of the newly issued shares under the Share Purchase Agreement from related government agencies or other persons5 correctly.

• The purchaser must obtain the approval on the waiver from the requirement to make a tender offer for all securities from the Office of SEC for the newly issued shares.


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• If necessary, the Company must obtain a consent or waiver from its existing debtors in the case that the purchase of the newly issued share by the purchaser may lead to the default of the agreement by the Company.

Remarks: 1. The debt to equity conversion price is THB 0.34 per share, totaling of THB 1,136,535,345.44 2. The waiver requesting person will nominate directors’ name for the appointment of the new directors. 3. The amendment of the authorized signatories of the Company will be agreed by both parties in the future. 4. The circumstance is any circumstance (including force majeure such as accident, natural disaster, riot, etc.) which

occurs and has aversely effects to the business, assets, financial position, or operating performance significantly, including a circumstance that affects ability to satisfy a party’s obligations under the Share Purchase Agreement.

5. Including the directors and shareholders of the purchaser.

Credit Agreement and 1st Amendment The waiver requesting person and Link Capital I (Mauritius) Limited (“Link Capital I”), a company established under the special objective I the SSG Group, have entered the Credit Agreement dated January 22, 2017 and the 1st amendment dated April 5, 2017 (“Credit Agreement”) . The agreement can be summarized as follow :

Parties G J Steel Public Company Limited or the Company as “ borrower” and Link Capital I (Mauritius) Limited or Link Capital I as “lender”

Loan Amount Lender agrees to grant loans to borrower of USD 7 1 ,0 0 0 ,0 0 0 in total which is consisted of the 1st portion of USD 4 1 ,0 0 0 ,0 0 0 and the 2nd portion of THB 30,000,000.

Objective of granting the loans

• Main objective of granting the loans under the Credit Agreement is to provide the Company a fund to repay some of its trade debts, bought from the Company’s previous trade creditor by the waiver requesting person and to use as working capital for its operation. Thus, the parties divide the loan amount under the Credit Agreement into 2 parts as follow:

• The borrower must use the 1st portion of loan for the following objective. - Repay some of accrued trade debts to the waiver requesting person

according to details stated in the Credit Agreement. - Pay or repay fees, costs, and expenses incurred to the lender related to

the borrowing1.

• The borrower must use the 2nd portion of loan for the following objective. - Use for the Company’s working capital such as raw material costs, major

spare part costs, service and administrative expenses with a written consent from the lender.

- Pay for other debt obligation ( if any) to trade creditors of the borrowers with a written consent from the lender.2

Interest rate 12% per year


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Borrowing fee The borrower must pay the borrowing fee to the lender at 2% of each loan amount drawdown

Condition Precedent for the 1st portion of the loan drawdown

The borrower must get a notification from the lender that ( a) the lander receives ( or renounce the right to receive) all documents and evidences as stated in the Credit Agreement and ( b) the borrower has fulfilled all related condition precedents for the 1st portion of the loan drawdown as stated in the Credit Agreement until the satisfaction of the lender. All condition precedents for the 1st portion of the loan drawdown must be fulfilled before the 1st portion of the loan drawdown.

Condition Precedent for the 2nd portion of the loan drawdown

• All condition precedents for the 1st portion of the loan drawdown have been fulfilled

• The waiver requesting person has received the trade debts under the Credit Agreement.

• The trade debt restructuring under the Credit Agreement ( including the debt to equity conversion) must be completed within 15 months from the 1st portion of the loan drawdown.

• For the loan with the objective to pay for the working capital, the lender must be received the receipt or other related documents in forms and with contents agreed by the lender.

• For the loan with the objective to for other debt obligation ( if any) to trade creditors of the borrowers (if any), terms and conditions of the payment must be in forms and have contents agreed by the lender.

• The lender has completed its due diligence so as to determine the amount of capital expenditure and working capital necessary to increase the Company’s production rate specified in the Credit Agreement.

• The lander finds that the borrow does not have an alternative financial source for the capital expenditure and working capital necessary to increase its production rate specified in the Credit Agreement.

• The borrower must send documents or evidences as stated in the Credit Agreement to the lender based on a request of the lender under the lender’ s determination solely.

Loan repayment • In the case that the lender sends a notice to the borrower to confirm the lender’s satisfaction of the completion of the trade debt restructuring as stated in the Credit Agreement on or before the due date of 15 months from the 1st portion of the loan drawdown. The borrower must repay the loan as the following schedule. - On the 4 years after the 1st portion of the loan drawdown, the borrower

must repay the loan for 30% of the remaining principal in the Credit Agreement.


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- On the 5 years after the 1st portion of the loan drawdown, the borrower must repay the loan for 100% of the remaining principal and other accrued loan amounts in the Credit Agreement and other financial contracts.

• If the trade debt restructuring is not completed as the lender’ s satisfaction on or before the due date of 15 months from the 1st portion of the loan drawdown, the borrower must repay all loans with in the 15 month from the 1st portion of the loan.

• According to the Credit Agreement, there is no term allowing the parties to extend the repayment period. If the borrower does not repay the loans within the period specified above, the borrower will trigger the default and must pay the default interest rate to the lender at 3% per year and the lender can ask a part or a whole amount of loan and interest immediately or per the lender’ s request as well as can enforce the collateral.

Remarks: 1. The fees, costs, and expenses incurred to the lender from the business appraiser, the due diligence of the borrower, and the Credit Agreement entrance.

2. The lender will determine an appropriateness of a payment for the debt obligation (if any) to trade creditors under the case by case basis because the main objective of the 2nd portion of the loan is to finance the Company’s working capital, thus, the payment for the debt obligation ( if any) is not under the main objective of the 2nd portion of the loan above.

Loan Repayment can be separated into 2 cases below: 1. If the Company obtains the approval to enter the Transaction from the shareholders’ meeting, the Company will have the repayment period of 5 years. The Company is able to utilize the remaining loan amount in order to increase the Company’s production utilisation rate and it can make operating profit which is expected to be repaid the loan. For the 1st repayment after the 4 years from the 1st portion of the loan utilization, the borrower must repay the loan for 30% of the remaining principal under the Credit Agreement. On the 5 year from the 1st portion of the loan utilization, the borrower the borrower must repay the loan for 100% of the remaining principal and other accrued loan amounts in the Credit Agreement and other financial contracts. The repayment scheme allows the Company a time to find other solution ( such as finding new investors or other sources of fund) if the Company’s operation does not go according to the plan. 2. If the Company does not obtain the approval to enter the Transaction from the shareholders’ meeting, the Company will have the loan repayment period of 15 months from the 1st portion of the loan utilization. In addition, under the Credit Agreement, there is no term allowing the parties to extend the repayment period. If the borrower does not repay the loans within the period specified above, the borrower will trigger the default and must pay the default interest rate to the lender at 3% per year and the lender can ask a part or a whole amount of loan and interest immediately or per the lender’ s request as well as can enforce the collateral. If so, the Company must find a new investor or other sources of fund in order to repay the loan.


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J. Information of Synergy Strategic Solutions Management DMCC

Company Name Synergy Strategic Solutions Management DMCC Head Office Unit No: 3006 DMCC Business Centre, Level No 1, Jewellery & Gemplex 3,

Dubai, United Arab Emirates Incorporated under the Laws of

United Arab Emirates

Registered Capital AED 50,000 Par Value AED 1,000 per share Shareholding Structure Sudhir Maheshwari directly owns 100 percent Directors Sudhir Maheshwari (Managing Director) Company’s experiences - Advised to leading steel producers in Middle East related to future

strategies and tactics - Advised to leading private equity fund in India for investments and

turnaround of reinforced steel companies - Advised to private equity funds globally and high-net-worth individuals in

India related to opportunities to invest in companies under special circumstance

- Advised to buy-out funds to invest in 2 projects in Asia Pacific Region - Advised to high- net- worth individuals to invest in steel mine in Latin

America Mr. Sudhir Maheshwari’ s experience

Mr. Sudhir has experiences fore than 27 years (1989 - 2015) with ArcelorMittal and he is in the management board of ArcelorMittal in the areas of the firm’s corporate finance, merger and acquisition ( M&A) , divestment, risk management, and operation in India and China. Mr. Sudhir is currently the vice chairman of the Corporate Finance and Tax Committee and the chairman of the Risk Management Committee of ArcelorMittal. He has raised considerable funding from financing / refinancing which earn reward on the transaction with a size of approximately USD 10,000 million. Mr. Sudhir is a key person in the M&A between Arcelor and Mittal in 2006 which has the value of approximately USD 34,000 and the operation after the M&A.


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2.2 Effects may occur to Shareholders In case the Company’s shareholder meeting approves the Connected Transaction, the effects can be analyzed into the following cases : Case 1 Analysis on the Effects which may occur from the Issuance of the Newly Issued Ordinary Shares

under the Debt to Equity Conversion Scheme to the Specific Investor (Private Placement) Control Dilution The dilution effect on the shareholding ratio (control dilution) can be calculated as follows:

Control Dilution = (QePP / (Qo + QePP))

Where Qo = number of the issued and paid-up ordinary shares of 10,585,378,217 shares QePP = additional newly issued shares from the debt to equity conversion of

3,342,751,016 shares

Control Dilution = 3,342,751,016 / (10,585,378,217 + 3,342,751,016)

= 24.00 %

Price Dilution

The dilution effect on the market price of the shares (price dilution) can be calculated as follows:

Price Dilution = (Po – PE) / Po

Where PE = [(Po*Qo) + (PePP*QePP)] / (Qo + QePP)

Po = market price calculated based on the average closing price for 7 consecutive business days prior to the date on which the Company’ s Board of Directors approved the offering of the newly issued ordinary shares under the debt to equity conversion scheme from July 4, 2017 to July 13, 2017 of THB 0.5272

PePP = new share price from the debt to equity conversion of THB 0.3400 per share

Qo = number of the issued and paid-up ordinary shares of 10,585,378,217 shares

QePP = additional newly issued shares from the debt to equity conversion of 3,342,751,016 shares

Thus PE = [(0.5272 * 10,585,378,217) + (0.3400 * 3,342,751,016)] / (10,585,378,217 + 3,342,751,016)

= THB 0.4822 per share

Price Dilution = (0.5272 – 0.4822) / 0.5272

= 8.52 %


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Earnings per Share Dilution

The dilution effect on the earnings per share (earnings per share dilution) can be calculated as follows:

EPS Dilution = [(NI / Qo) – (NI / (Qo + QePP))] / (NI / Qo)

Where NI = net profit for the period from April 1, 2016, to March 31, 2017 of THB 835,163,466



EPS Dilution = [(835,163,466 / 10,585,378,217) – (835,163,466 / (10,585,378,217 + 3,342,751,016))] / (835,163,466 / 10,585,378,217)

= 24.00 %

Case 2 Analysis on the Effects which may occur from the Issuance of the Newly Issued Ordinary Shares under the Debt to Equity Conversion Scheme to the Specific Investor (Private Placement) and the Exercise of Warrants22

Remark : The analysis of the effects is based on assumptions that the warrant holders are not the existing shareholders and all warrant holders choose to exercise all of the warrants owned.

Control Dilution The dilution effect on the shareholding ratio (control dilution) can be calculated as follows:

Control Dilution = (QePP + QeW2 + QeW3 + QeW4) / (Qo + QePP + QeW2 + QeW3 + QeW4)

Where Qo = number of the issued and paid-up ordinary shares of 10,585,378,217 shares


QeW2 = number of the shares to accommodate the exercise of the warrants no. 2 of 1,957,499,981 shares (after the adjustment of rights)

QeW3 = the number of the shares to accommodate the exercise of the warrants no. 3 of 1,606,677,915 shares (after the adjustment of rights)


22 The warrants of the Company include the warrants to purchase the newly issues ordinary shares of the Company No. 2 ( GJS-W2 ) ; the

warrants to purchase the newly issues ordinary shares of the Company No. 3 ( GJS-W3 ) ; and the warrants to purchase the newly issues ordinary shares of the Company No. 4 (GJS-W4), which remained outstanding at 1,790,700,159 units for GJS-W2; 1,469,771,865 units for GJS-W3; and 1,140,134,230 units for GJS-W4 as at June 30, 2017, which is the latest warrants exercise date.


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Control Dilution = (3,342,751,016 + 1,957,499,981 + 1,606,677,915 + 1,246,335,252) / (10,585,378,217 + 3,342,751,016 + 1,957,499,981 + 1,606,677,915 + 1,246,335,252)

= 43.51 %

Price Dilution The dilution effect on the market price of the shares (price dilution) can be calculated as follows:

Price Dilution = (Po – PE) / Po

Where PE = [(Po*Qo) + (PePP*QePP) + (PeW2*QeW2) + (PeW3*QeW3) + (PeW4*QeW4)] / (Qo + QePP + QeW2 + QeW3 + QeW4)

Po = market price calculated based on the average closing price for 7 consecutive business days prior to the date on which the Company’ s Board of Directors approved the offering of the newly issued ordinary shares under the debt to equity conversion scheme from July 4, 2017 to July 13, 2017 of THB 0.5272

PePP = new share price from the debt to equity conversion of THB 0.3400 per share

PeW2 = exercise price of the warrants no. 2 of THB 1.8936 per share (after the adjustment of rights)

PeW3 = exercise price of the warrants no. 3 of THB 1.3722 per share (after the adjustment of rights)

PeW4 = exercise price of the warrants no.4 of THB 1.3722 per share (after the adjustment of rights)







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Thus, PE = [(0.5272 * 10,585,378,217) + (0.3400 * 3,342,751,016) + (1.8936 * 1,957,499,981) + (1.3722 * 1,606,677,915) + (1.3722 * 1,246,335,252)] / (10,585,378,217 + 3,342,751,016 + 1,957,499,981 + 1,606,677,915 + 1,246,335,252)

= 0.7652 baht per share

Price Dilution = Since the market price (Po THB 0.5272) is lower than the average share price after adjustment of the rights (PE THBB 0.7652), therefore, there is no price dilution in this case.

Earnings per Share Dilution The dilution effect on the earnings per share (earnings per share dilution) can be calculated as follows:

EPS Dilution = [(NI / Qo) – (NI / (Qo + QePP + QeW2 + QeW3 + QeW4))] / (NI / Qo)

Where NI = net profit for the period from April 1, 2016, to March 31, 2017 of THB 835,163,466






EPS Dilution = [(835,163,466 / 10,585,378,217) – (835,163,466 / (10,585,378,217 + 3,342,751,016 + 1,957,499,981 + 1,606,677,915 + 1,246,335,252))] / (835,163,466 / 10,585,378,217)

= 43.51 %

The Independent Financial Advisor has an opinion that the Case 2 ( effects may occur from the issuance of the newly issued ordinary shares under the Debt to Equity Conversion Scheme to the specific investor ( Private Placement and the exercise of warrants) has low possibility because, during the study of the effects (July 2017) , the warrant no. 2 - 4 ( GJS- W2, GJS- W3, and GJS- W4) have the exercise prices of the GJS- W2, GJS- W3, and GJS- W4 warrants greater than the market price ( Out of the money) , thus, the holders of the GJS- W2, GJS- W3, and GJS- W4 warrants may choose to invest in the GJS ordinary shares rather than exercise the Company’ s warrants, which requires higher investment amount.


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2.3 Benefits or pros of the Transaction 1. Decrease the Company’s debt obligations

The Company will be able to reduce its debt obligation via the conversion of debt to equity which can decrease the Company’ s debt of USD 32,934,250. 00 or equivalent to THB 1,1 3 6 ,5 3 5 ,345. 40. The debt reduction can be separated into the accrued trade receivable of USD 32,345,883 or equivalent to THB 1,116,231,264.42 and the accrued interest of USD 588,367 or equivalent to THB 20,304,087.55. In addition, the Company will receive the 1st portion of the interest waiver of USD 2,995,462 and the 2nd portion of USD 765,190 together with the related withholding tax of USD 663,644. The interest waiver will be effective immediately if the Debt to Equity Conversion Transaction is approved by the shareholders’ meeting of GJS which will result to the reduction of the withholding tax. Total benefits that the Company gains from the debt reduction are USD 37,358,546 or equivalent to THB 1,289,214,378. The Connected Transaction will reduce future interest burden since the conversion of debt to equity can relieve the Company’s debt.

2. Have Additional Financial Supports After entering the Connected Transaction, if the Company can fulfill all of the conditions under the Credit Agreement stated in the Section 1. 7 Conditions of the Transaction, the Company will have a right to drawdown additional loans from the SSG Group for capital expenditure, working capital, and other debt repayments of the Company because, currently, the Company experiences its operating loss from its business operation and has low level of cash flow from operating activities compared to the total liabilities according to the summary of Company’s financial statements, with the situation, the Company’s ability to find sources of funds from financial institutions is limited.

3. Increase the Production Efficiency After entering the Connected Transaction, if the Company can fulfill all of the conditions under the Credit Agreement of the SSG Group, the Company will have a right to drawdown additional loans from the SSG Group to maintain and improve its machine and equipment, which will enable the Company to run its production of 100,000 tons per month or equivalent to 100 percent of its maximum capacity and will enhance the Company’s operation since presently GJS has insufficient working capital in order to secure raw material for its maximum capacity ( Maximum Capacity) . Therefore, to save cost of electricity for smelting steel scrap, the Company currently chooses its production period during the low electricity usage (Off Peak) which results that the Company can run its production utilization at approximately 61 percent of the maximum capacity.



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5. Increase Net Profit Margin The Company may have a superior net profit margin because of the reduction of its debt obligation which can lessen interest expenses immediately. Furthermore, since the SSG Group will hire the team of experts with experience and reputation in managing the world’ s leading companies in the steel industry in order to increase the Company’ s production and internal management efficiency, the Company should be able to decrease its production cost per unit and can manage its inventory more efficient. ( Please see additional details in Section 2. 1. 6 Other Related Information may affect Shareholders under Subsection B. Impacts to Statements of Financial Position from the Transaction)



2.4 Cons of the Transactions 1. Effects to Shareholders

After the Connected Transaction, the existing shareholders will be affected by the reduction of the share price ( Price Dilution) equivalent to 24. 00 percent of the holding portion, the dilution effect on the shareholding ratio (Control Dilution) equivalent to 8.52 percent and the dilution effect on the earnings per share (Earnings per Share Dilution) equivalent to 24.00 percent, theoretically.

2. The Company will not receive proceed from the capital increase Because the Connected Transaction is the allocation and offering of the Company’ s newly issued ordinary shares under the Debt to Equity Conversion Scheme, the Company, then, will not receive funds from the capital increase. However, the debt to equity conversion will reduce the Company’ s debt and, after the transaction, the Company will have a right to receive additional financial support from the SSG Group .


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3. Increase the Company’s Interest Rate from Borrowing After the Connected Transaction, the Company will have a right to receive additional financial support from the SSG Group for capital expenditure, working capital, and other debt repayments of the Company. However, the loans from the SSG Group have the interest rate of 12 percent per year which is higher than current interest rates from financial institutions in general because the Company experiences its operating loss from its business operation and has low level of cash flow from operating activities compared to the total liabilities according to the summary of Company’ s financial statements. Such situation limited the Company’s ability to find sources of funds from common financial institutions.

4. Accounting Loss occurred After the Connected Transaction, the Company may suffer from an accounting loss because recognition of the difference between the fair value of the shares and the offering price under the Debt to Equity Conversion Scheme which will be recognized as an expense the debt restructuring according to the related accounting standard. The recognition of the item may incur more net accounting loss in its statement of comprehensive income . ( Please see additional details in Section 2. 1. 6 Other Related Information may affect Shareholders under Subsection B. Impacts to Statements of Financial Position from the Transaction)

5. Transaction is a connected transaction Although, presently, the SSG Group has no relationship with the Company, management, controlling person, or major shareholder of the Company and the Company has no management, controlling person, or major shareholders in the SSG Group, but after the Connected Transaction, the SSG Group will become a major shareholder of the Company, which will directly hold 24 percent of the total issued shares of the Company and indirectly hold 18.97 percent of the total issued shares of the Company through GSTEL (after registration of the Company’s paid-up capital23. Therefore, the transaction is deemed to be a connected transaction.

6. Conflict of Interest After the Connected Transaction, the SSG Group will be a major shareholder of the Company and The SSG Group is a group of juristic persons consisting of investment funds with proficiency in investing in companies with financial problems and distressed assets and a strong expertise in debt management and business turnarounds. Since the SSG Group is a fund and has many investments, it may invest in other companies that have businesses which conflict with the Company’ s business or it may invest in a company that may have conflict of interest with the Company in the future. Currently, the SSG Group has no transaction which has a conflict of interest with the Company.




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2.5 Risk Factors 1. Approval of the GJS Shareholder Meeting to enter the Connected Transaction and waiver from the

requirement to make a tender offer for all securities of the business by virtue of the resolution of the shareholders' meeting (Whitewash) An approval from the GJS Shareholder Meeting is one of the conditions before entering into the Connected Transaction together with the waiver from the requirement to make a tender offer for all securities of the business by virtue of the resolution of the shareholders' meeting (Whitewash). If the Company’s Shareholder Meeting does not approve the Connected Transaction or does not approve the waiver from the requirement to make a tender offer for all securities of the business by virtue of the resolution of the shareholders' meeting ( Whitewash) , the Company will not be able to convert debt to equity and will not receive any additional financial support from the SSG Group.



4. Risk from future takeover Because the SSG Group is a fund with investment period of approximately 5 – 7 years and when the investment period ends or the SSG Group can earn fair return which meets the fund’s policy, the SSG Group may sell entire or some shares of the Company to other investors. Nonetheless, if the SSG Group sell the Company’ s shares entirely or in part to a group of investors more than 25. 00 percent, the new investors obliges to make a tender offer for all securities of the business by virtue of the resolution of the shareholders' meeting ( Whitewash) , which gives the Company’ s shareholders an opportunity to consider together including the consideration to continue investing in the Company.


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2.6 Comparison of Benefits and Effects between entering the Transaction with related persons and with others Benefits or Pros if entering the Transaction with related persons

1. Completed the due diligence 2. Receive support from the expert 3. Receive additional financial support 4. Reduce debt obligation immediately

Effect or Cons if entering the Transaction with related persons 1. The Company receives no cash from the capital increase 2. Interest rate of the Company increases 3. The Transaction is a connected transaction 4. Conflict of Interest

Benefits or Pros if entering the Transaction with others 1. No connected transaction and might have no conflict of interest 2. Might receive a better offer from a negotiation 3. The Company has no personal cost from hiring Synergy

Effect or Cons if entering the Transaction with others 1. The due diligence process must be redo 2. The negotiation for the conditions must be redo 3. Time to operate 4. Debt obligation burden still unsolved

2.7 Comparison of Benefits and Effects if do not enter the Transaction

Benefits or pros if do not enter the Transaction 1. No Dilution Effect

There will be no effect to the shareholders from Price Dilution, Control Dilution, and Earnings per Share Dilution.

2. No Connected Transaction and No Conflict of Interest If there is no transaction, the SSG Group will not be a major shareholders or a controlling person of the Company, a transaction, which may be occurred with the SSG Group, will not be a connected transaction or a conflict of interest.

3. No risks from the change of policy from the new investor group If there is no transaction, the SSG Group will not be a major shareholders or a controlling person of the Company, thus, it has no right to appoint the directors of the Company.


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Effects or cons if do not enter the Transaction 1. Effect to the Company’s Financial Statements

Due to the Company’ s financial circumstance that the Company has suffered from liquidity problem, working capital shortage, low gross profit margin, net loss, accrued debt and interest, and lack from support from financial institution or high cost of funding, the Company’ s shareholder equity might be affected from the problem directly. ( Please see additional details in Section 2 . 1 . 6 Other Related Information may affect Shareholders under the Subsection B. Impacts to the Statement of Financial Position from the Transaction)

2. Lawsuit and Legal Execution If the Company’s financial obligation has not been solved, the debt obligation will not decrease and the Company might have a risk from legal execution.

3. Need to find a new investor The Company must start to find an investor or a new approach to solve its financial problems which may require a quite amount of time.

4. Limitation to find sources of fund Because the Company has suffered from operating loss and low level of cash flow compared its total liabilities in the summary of the Company’ s financial statements, there is a limitation of the Company to find a loan from financial institution, currently.

5. Adequacy of the machine maintenance According to the interview with the management and the site visit to the Company’ s plant, the Independent Financial Advisor believes that the Company’s machine is relatively old and further needs maintenance which requires capital from the additional financial assistance from the SSG Group. If the machine maintenance is not adequate, it may affect the Company’ s production processes in the long run.


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3. Valuation 3.1 Valuation of the Fair Value of the GJS Share Price

To evaluate the value of GJS share price, the Independent Financial Advisor considered by using information obtained from the Company’ s management interview, the reviewed financial statements, and the asset appraisal reports from the independent appraisers certified by the Office of Stock Exchange Commission (“SEC”) together with information publicly announced.

However, the opinion of the Independent Financial Advisor is based on the assumption that the obtained information and documents are correct and true without any material change and considered from economy situation and information during the study period. Therefore, if there is any change, it that might materially affect the Company’ s operation and valuation as well as shareholders’ decision.

In order to determine the Transaction fair price, the Independent Financial Advisor has evaluated the GJS share price by using the 5 following approaches.

1. Book Value Approach 2. Adjusted Book Value Approach 3. Historical Market Price Approach 4. Market Comparable Approach

4.1 Price to Book Value Ratio Approach or P/BV Ratio 4.2 Price to Earnings Ratio Approach: P/E Ratio

5. Discounted Cash Flow Approach


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1. Book Value Approach The valuation approach considers a value of the GJS shares from its financial statements at a certain point of time.

The valuation approach will appraise the share value based on the net asset value (Total Assets minus Total Liabilities) or similar to the shareholders' equity, then, divided by number of shares. Thus, it will derive the share value based on the book value from the GJS’s financial statements.

The valuation of the GJS shares is based on the financial statements as of March 31, 2017 which is the most current of its financial statements reviewed by the SEC certified auditor. Summary of the GJS’ s share value can be summarized as follow:

(unit : thousand)

Shareholders’ Equity of GJS As of March 31, 2017 (Reviewed Financial

Statements) Share Capital

Registered share capital 103,137,868 Issued and paid-up share capital 73,039,110

Warrants to buy shares 147,992 Premium (Discount) on ordinary shares (39,828,910) Retained Earnings Appropriated

Legal reserve 18,507 Deficit (20,628,847) Other components of equity 161,689 Total Shareholders’ Equity 12,909,541

GJS’s number of shares 10,585,378,217 shares GJS’s price per share THB 1.22 per share

Based on the Book Value Approach by using the GJS’ s book value as of March 31, 2017, the total value is approximately THB 12,909.54 million or approximately THB 1.22 per share.

The Book Value Approach considers a financial position and asset value of a company at a certain point of time. However, the Book Value Approach cannot reflect a true market value of the assets and ability to generate income of the business in the future, so, the Independent Financial Advisor believes that the Book Value Approach does not reflect the true price of the Company and its ability to generate income of its business in the future. Thus, the valuation approach is not appropriate to evaluate the GJS share price or business.


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2. Adjusted Book Value Approach The valuation approach considers a value from subtracting a company’ s total assets by its total liabilities at a

certain point of time and then adjusts with key items occurred after the financial statements conducted or with items that affect the book value and better reflect the true value of the firm, finally, we divide the adjusted number by number of shares of the company.

To value the GJS’ s share price by the approach, the Independent Financial Advisor uses the book value of the GJS’ s equity holders appeared in the financial statements as of March 31, 2017, reviewed by the SEC certified auditor, then, adjusts by premium or discount of key items in the assets and liabilities which have impacts to the book value of GJS as of March 31, 2017, significantly.

Adjusted Items to the Book Value Adjust with premium or discount from the market price of the GJS’s fixed assets

GJS has appointed an Independent Appraiser, American Appraisal ( Thailand) Company Limited which is a certified appraiser by Valuation Association of Thailand ( “ VAT” ) and a certified appraiser to value properties in capital market by the Office of SEC, to evaluate values of the GJS’s land, building, and machine. The appraisal report has objective for public use and it was conducted on May 31, 2017. The adjustments are as follow: (Please see additional information in “Part 3 Details of Evaluated Assets appraised by American Appraisal (Thailand) Company Limited”)

Summary of the Adjustments from the Asset Appraisal (unit : THB million)

No. Asset Types Appraisal Approach Value from the

Appraiser (1)

Book Value as of Mar 31, 2017

(2)

Increase / Decrease (1) – (2)

Land Market Approach 890.00 761.03 128.97 Land Adjustment Cost Approach 60.70 39.02 21.68 Building Cost Approach 1,477.50 2,067.04 -589.54 Machine Cost Approach *15,423.40 8,793.71 6,629.69

Total 17,851.60 11,660.80 6,190.80 * The Independent Financial Advisor has the opinion that the value of the machine and equipment may not be appropriate because the Independent Appraiser has evaluated based on the assumption that during the plant shut down for 5 years and 8 months, the machine and equipment were maintained properly and the Independent Appraiser applied the depreciation in the plant shut down period only 50 percent of normal depreciation. Moreover, resulting from the plant shut down, the Independent Appraiser increased the remaining useful life of machine and equipment for half of the shutdown period. The Independent Financial Advisor deems that the decrease of depreciation and increase of useful life of the machine and equipment may overestimate the valuation of the machine and equipment compared to their existing condition.

Summary of the adjustment of the GJS’s fixed asset market value is THB 6,190.80 million.


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Summary of the Book Value Adjustment Based on the Adjusted Book Value Approach, the GJS’s book value after the adjustments is below.

(unit : THB million) Shareholders’ Equity of GJS as of March 31, 2017 12,909.54

Adjusting items Premium or discount from the market price of the GJS’s fixed assets 6,190.80 GJS’s value after the adjustments 19,100.34 Number of GJS’s shares (shares) as of March 31, 2017 10,585,378,217 shares GJS’s Price per Share (baht per share) after the adjustments THB 1.80 per share

Thus, with the Adjusted Book Value Approach based on the GJS’ s book value as of March 31, 2017, the total value is approximately THB 19,100.34 million or approximately THB 1.80 per share.

The Adjusted Book Value Approach considers a financial position at a certain point of time and the book value of the assets will be adjusted with key items occurred after the financial statements conducted but the approach does not reflect a true market value of the assets and ability to generate income of the business in the future. Consequently, the Independent Financial Advisor believes that the Adjusted Book Value Approach cannot reflect the true value of GJS and its ability to generate income of its business in the future. Thus, the valuation approach is not appropriate to evaluate the GJS’s share price or business.

3. Historical Market Price Approach According to the valuation approach, the Market Price Approach considers the historical trading price and volume

of GJS in the Stock Exchange of Thailand. The Independent Financial Advisor calculates the Volume Weighted Average Price during the 15 – 180 days retrospectively from July 14, 2017 which is the day that the Company’s Board of Directors approved the Connected Transaction. The market price can reflect to the demand and supply for the ordinary shares of GJS in the Stock Exchange regarding that investors acknowledge information related to industry and economic conditions under normal market circumstance. Details of the GJS’s ordinary share trading in each period can be summarized as follow.

Historical Average Data Market Price (baht per share) Average Daily

Trading Volume (shares)

Weighted Average Price (baht per share) Max Min Avg. Closed

Price 15 business days 0.60 0.45 0.53 317,686,747 0.54 30 business days 0.60 0.34 0.46 223,838,439 0.51 60 business days 0.60 0.30 0.39 117,510,498 0.50 90 business days 0.60 0.30 0.37 80,983,534 0.50

180 business days 0.60 0.29 0.35 57,110,163 0.45 Price Range of GJS’s Share (baht per share)) 0.45 – 0.54

Source: Information from www.setsmart.com

http://www.setsmart.com/


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Additional Comments As of May 15, 2017, the Company has announced notifications via www.set.or.th as follow :

• At 18: 56 hours announced Financial Statements of the Quarter 1/ 2017 and Notes of the Financial Statements Section 1.3 The Company’s debt restructuring

• At 18: 57 hours announced Progress Report of the default of the trade creditors for the Quarter 1/ 2017 in Section I Liabilities under the debt restructuring

The 2 notifications announced that the Company has received the notice of assignment to debtor from four foreign trade creditors to a new foreign company. The new trade creditor agrees to reduce the unpaid interest of USD 15 million to the Company and requires the Company to restructure its debts with the new creditor. ( Please see additional details at www. set. or. th in the Company’ s Notes of the Financial Statements of the Quarter 1/ 2017 and the Progress Report of the default of the trade creditors). The above information may affect the trading volume of the GJS’s shares on May 16, 2017 and became unusual.

Historical Trading Information of GJS Shares

Date Max

(THB) Min

(THB)

Closed Price

(THB)

Daily Trading Volume (shares)

Remarks

13/7/2017 0.51 0.49 0.49 88,485,300.00 Average trading volume is approximately 166,200,000 shares per day. (Average between 16/5/2017 – 13/7/2017) Trading price started increasing significantly since 14/6/2017

12/7/2017 0.51 0.47 0.5 327,033,150.00 11/7/2017 0.51 0.47 0.48 555,246,450.00 7/7/2017 0.58 0.52 0.52 325,382,040.00 6/7/2017 0.6 0.56 0.57 375,621,000.00 5/7/2017 0.59 0.56 0.57 181,686,630.00 4/7/2017 0.6 0.56 0.57 392,802,550.00 3/7/2017 0.59 0.53 0.59 753,569,409.00

30/6/2017 0.55 0.51 0.52 198,848,100.00 29/6/2017 0.58 0.54 0.54 217,970,800.00 28/6/2017 0.56 0.53 0.55 166,291,040.00 27/6/2017 0.55 0.51 0.55 385,968,259.00 26/6/2017 0.53 0.49 0.51 199,489,200.00 23/6/2017 0.53 0.47 0.5 462,342,802.00 22/6/2017 0.49 0.45 0.47 134,564,469.00 21/6/2017 0.47 0.45 0.46 68,595,521.00 20/6/2017 0.49 0.47 0.47 115,869,650.00 19/6/2017 0.48 0.44 0.47 142,987,540.00 16/6/2017 0.48 0.42 0.44 247,536,830.00 15/6/2017 0.51 0.44 0.45 679,441,430.00


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Date Max

(THB) Min

(THB)

Closed Price

(THB)


Remarks

14/6/2017 0.48 0.37 0.48 494,803,256.00 13/6/2017 0.37 0.36 0.37 58,974,010.00 12/6/2017 0.37 0.35 0.36 27,288,949.00 9/6/2017 0.36 0.34 0.35 7,566,900.00 8/6/2017 0.35 0.34 0.35 35,374,900.00 7/6/2017 0.35 0.34 0.35 16,357,600.00 6/6/2017 0.36 0.34 0.35 21,187,300.00 5/6/2017 0.35 0.34 0.34 2,760,500.00 2/6/2017 0.35 0.34 0.34 15,786,225.00 1/6/2017 0.35 0.34 0.34 15,321,350.00

31/5/2017 0.34 0.33 0.34 46,876,200.00 30/5/2017 0.34 0.33 0.33 8,220,200.00 29/5/2017 0.34 0.33 0.33 2,663,200.00 26/5/2017 0.34 0.33 0.34 11,769,400.00 25/5/2017 0.34 0.33 0.34 7,978,300.00 24/5/2017 0.35 0.34 0.34 14,183,200.00 23/5/2017 0.34 0.33 0.34 12,939,400.00 22/5/2017 0.33 0.32 0.33 7,901,100.00 19/5/2017 0.34 0.32 0.33 12,127,950.00 18/5/2017 0.34 0.33 0.33 10,636,900.00 17/5/2017 0.34 0.33 0.33 13,339,200.00 16/5/2017 0.34 0.32 0.34 116,748,700.00 15/5/2017 0.32 0.3 0.3 6,585,550.00 Average trading volume is

approximately 3,750,000 shares per day. (Average between 3/4/2017 – 15/5/2017) After trading time on May 15, 2017, the Company announced the news via www.set.or.th as follow: - At 18:56 hours announced

Financial Statements of the

12/5/2017 0.32 0.31 0.31 7,285,300.00 11/5/2017 0.33 0.31 0.32 9,145,000.00 9/5/2017 0.32 0.32 0.32 2,815,340.00 8/5/2017 0.32 0.32 0.32 1,546,800.00 5/5/2017 0.33 0.31 0.32 7,349,300.00 4/5/2017 0.33 0.31 0.33 4,136,602.00 3/5/2017 0.33 0.32 0.32 5,373,370.00 2/5/2017 0.33 0.32 0.32 1,179,150.00

28/4/2017 0.32 0.32 0.32 1,302,400.00 27/4/2017 0.32 0.32 0.32 2,270,000.00 26/4/2017 0.32 0.31 0.32 707,100.00



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Date Max

(THB) Min

(THB)

Closed Price

(THB)


Remarks

25/4/2017 0.32 0.31 0.32 3,189,800.00 Quarter 1/2017 and Notes of the Financial Statements Section 1.3 The Company’s debt restructuring

- At 18:57 hours announced Progress Report of the default of the trade creditors for the Quarter 1/2017 in Section I Liabilities under the debt restructuring

24/4/2017 0.33 0.32 0.32 5,587,200.00 21/4/2017 0.33 0.32 0.33 955,000.00 20/4/2017 0.33 0.31 0.32 3,494,920.00 19/4/2017 0.33 0.31 0.32 5,249,050.00 18/4/2017 0.33 0.32 0.32 1,921,070.00 17/4/2017 0.33 0.32 0.32 2,951,000.00 12/4/2017 0.33 0.32 0.33 3,324,600.00 11/4/2017 0.33 0.32 0.33 5,472,700.00 10/4/2017 0.33 0.32 0.33 3,046,200.00 7/4/2017 0.34 0.33 0.33 5,566,800.00 5/4/2017 0.34 0.33 0.33 4,177,707.00 4/4/2017 0.34 0.33 0.33 2,595,210.00 3/4/2017 0.34 0.33 0.33 724,300.00

Source: Information from www.setsmart.com

Based on the Information of the Company, the SSG Group led by SSG Capital Holdings Limited intends to do the debt restructure of G Steel Public Company Limited and G J Steel Public Company Limited. Consequently, on May 26, 2017 the Company has signed the Memorandum of Understanding (“MOU”) with Kendrick Global Limited, the subsidiary of SSG Capital Partners III L.P.

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

GJS Historical Price

FS announce

MOU Unusual price

http://www.setsmart.com/


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Thus, to value the Connected Transaction of GJS, the Independent Financial Advisor has an opinion that the calculation of the Volume Weighted Average Price) should be during the 15 – 180 days retrospectively from May 26, 2017, which is the date that the Company signed the MOU with the SSG Group. Details of the GJS’s share trading in each period can be summarized as follow:

Historical Average Data Market Price (baht per share) Average Daily

Trading Volume (shares)

Weighted Average Price (baht per share) Max Min Avg. Closed

Price 15 business days 0.35 0.30 0.33 15,647,909 0.33

30 business days 0.35 0.30 0.32 9,358,073 0.33

60 business days 0.35 0.30 0.33 9,293,841 0.33

90 business days 0.36 0.30 0.33 11,120,238 0.34

180 business days 0.40 0.22 0.33 30,065,874 0.34

Price Range of GJS’s Share (baht per share)) 0.33 – 0.34

Based on the Historical Market Price Approach, 2017, the GJS’s ordinary share will be approximately between THB 0.33 – 0.34 per share.

The Historical Market Price Approach is the approach to evaluate security price by referring historical trading price in the Stock Exchange of Thailand under normal circumstance that investors can buy/ sell the security at a price and volume which buyers and sellers satisfy. Thus, the approach can reflect the value of the security and the market share price can reflect demand and supply of the GJS’ s share in the Stock Exchange by investors who have knowledge and related information of industry circumstance and economic condition in general. The Independent Financial Advisor has an opinion that the Historical Market Price Approach is appropriate to evaluate the share price or business.

4. Market Comparable Approach 4.1 Price to Book Value Ratio Approach (P/BV Ratio)

The Price to Book Value Ratio Approach uses the book values per share of the GJS as of March 31, 2017 in the Book Value Approach ( Subsection 1 ) of THB 1. 22 per share and multiplies by the average Price to Book Value Ratio (P/BV) of listed companies in the Stock Exchange of Thailand (“SET”).

The Independent Financial Advisor selects companies in Steel Sector for 27 companies as the comparable in order to show how many time the investors are willing to give a premium to the book value ( Price Premium) for Steel Sector. Nonetheless, because the companies in the Steel Sector may have some companies that have different business operation such as smelting iron industry, steel production industry, trading company, holding company, and they might have different product types. So, it is the limitation of the comparable approach.


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Summary of details of 27 companies in the Steel Sector as the comparable companies

Symbol Company Names Businesses

SSI Sahaviriya Steel Industries Public Company Limited

The company engages in the manufacture and distribution of hot-rolled coils for structural uses, for pipe and tube products, for automotive structural uses, for machine structures and for general uses.

TUCC Thai Unique Coil Center Public Company Limited

The company's principal business is the production and selling of stainless steel which are stainless steel coils and stainless steel strips, and transformed raw materials, which are stainless steel pipes, stainless steel sheets, finished stainless surface. The Company also provides services related to the cutting of stainless sheets, galvanized iron and other metals.

RICH Rich Asia Corporation Public Company Limited

Seller and supplier of steel products which acquired from trading as well as hiring other steel plants to produce the products for the company, the company is also a trader and supplier of other types of steel products including raw materials and finished products. The finished products are composed of, for example, structural steel pipe, lipped channel, hot rolled coil and sheets, billets, and others.

TWP Thai Wire Products Public Company Limited

The company operates in manufacturing and selling of prestressed concrete wire.

CSP Csp Steel Center Public Company Limited

The company operates as a steel service center by providing and cutting cold rolled steel, hot rolled steel and coated steel in both plate and slitting coil types. The Company is also produce cold rolled steel pipe.

TSTH Tata Steel (Thailand) Public Company Limited

The company operates as investment holding company producing rebars, wire rods and small sections that used as raw material for construction parts.

TYCN Tycoons Worldwide Group (Thailand) Public Company Limited

To manufacture and distribute wire rod ( include reinforcing bar),annealed wire, screw and bolt (include thread rod)

SMIT Sahamit Machinery Public Company Limited

The company's main areas of business are an importer and distributor of product groups consisting of the distributor of special steel, distributor of machines for the production of molds, the distributor of paper products, the distributor of machineries and equipment’ s for wood and furniture industry.

SSSC Siam Steel Service Center Public Company Limited

The principal business of the Company is the manufacturing of steel parts used as accessories of steels used in industry including the steel cutting services, construction materials e. g. building structures, and metal stamping products and other products.

CITY City Steel Public Company Limited The company engages in business of sales of metal products.


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CEN Capital Engineering Network Public Company Limited

The company is a holding company which currently has 6 subsidiary companies.

TMT Thai Metal Trade Public Company Limited

Producer, supplier, integrated steel solution provider.

TIW Thailand Iron Works Public Company Limited

The Company operates in the manufacturing and distribution of galvanized iron sheets and Color Metal Sheet products.

TGPRO Thai-German Products Public Company Limited

Company has operated as the manufacturer and distributor of stainless steel under the TGPRO trademark for using in various manufacturing industries and using in Construction Industry in decorating and furnishing.

MAX Max Metal Corporation Public Company Limited

The company operates as distributor of steel products, all types of transformed steel, and equipment used for steel products and steel production. Moreover, it invests in real estate, golf course, and power business.

GJS G J Steel Public Company Limited The company produces hot rolled coil and downstream industries steel products which can be divided as following 1 . hot rolled coil 2 . tempered hot rolled coil 3. hot rolled pickled and oiled product.

SAM Samchai Steel Industries Public Company Limited

The Company manufactures steel pipes for the usage in the construction and the furniture industries. The products are categorized into 4 types which are structural steel pipes, galvanized steel pipes, furniture pipes, and hot rolled steel plates and sheets.

INOX Posco-Thainox Public Company Limited

Manufacturing and selling of cold- rolled stainless steel for domestic and export.

BSBM Bangsaphan Barmill Public Company Limited

The company is the manufacture and distribution of deformed and round steel bars.

PERM Permsin Steel Works Public Company Limited

To produce and sell of hot rolled steel, cold rolled steel, c- channel galvanized high tensile strength, electro-galvanized steel, c-line, c-u, t-bar and roll forming metal sheet.

MCS M.C.S.Steel Public Company Limited

The Company manufacturers large structured steel fabrication especially steel structures to be used as a beam and column box, which have high resistance to earthquake and useful for construction of large and high-rise building.

THE The Steel Public Company Limited The company distributes various steel products as raw material and transformed steel, and cold rolled steel together with other steel products. Moreover, the company is also a steel producer.

AMC Asia Metal Public Company Limited The company engages in the production and distribution of processed steel products including the integrated steel roll coiled, both hot-rolled and cold- rolled type, the cut- and- steel sheet, and rolling a Little (slitting coil) by the size demand by the customers.


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MILL Millcon Steel Public Company Limited

The company is a manufacturer and trader of many kinds of steel products such as, round bars, deformed bars, lip channel steel, steel pipe, wire rod, and etc.

LHK Lohakit Metal Public Company Limited

The Company is the service provider of stainless steel. The company is also manufacturing and distributing stainless steel pipe i.e. stainless steel for ornamental tube and stainless steel pipe for automotive industry as well as processing and distributing electro-galvanized steel and coil and galvanized steel sheet and coil, providing various services such as cutting, drilling, polishing as per customers' requirements.

PAP Pacific Pipe Public Company Limited

The Company manufactures and distributes steel pipes, produced by process of electric resistance welded production system. The Company's products can be categorized into 2 types, which are black steel pipes and galvanized steel pipes. Each type has 2 grades, which are standard grade and commercial grade. Steel pipes with standard grade is labeled and sold under Pacific Pipe while steel pipes with commercial grade is labeled and sold under Tamose.

GSTEL G Steel Public Company Limited The Company is the producer and distributor of hot rolled coil and slab. Its products serve as raw materials for such downstream industries as cold rolled coils, galvanized steel, steel pipe, structural steel products for construction, LPG container, automobile, electrical appliance as well as steel furniture industries.

Sources : www.set.or.th

The valuation approach has the calculation formula as follow:

Enterprise Value = P/BV Ratio of Comparable Companies X Book Value of the Company (31 May 17)

For the GJS’ s ordinary share valuation by using the Price to Book Value Ratio Approach, the Independent Financial Advisor has set July 14, 2 0 1 7 , which is the day that the Company’ s Board of Director approved the Connected Transaction, as the day to calculate the historical average Price to Book Value Ratio ( P/ BV) . The Independent Financial Advisor calculates the P/BV during the 15 – 180 business days retrospectively (180 days is a period that can sufficiently cover fluctuation). Details are as follow.


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Summary of the Price to Book Ratio (P/BV) of the 27 listed comparable companies

No. Symbol Average Historical P/BV (business days)

15 days 30 days 60 days 90 days 180 days 1 SSI N/A N/A N/A N/A N/A 2 TUCC N/A N/A N/A N/A N/A 3 RICH N/A N/A N/A 0.66 0.83 4 TWP 0.86 0.90 0.88 0.88 0.88 5 CSP 1.85 1.91 1.68 1.61 1.55 6 TSTH 0.95 0.93 0.90 0.92 0.90 7 TYCN 0.50 0.51 0.48 0.46 0.43 8 SMIT 1.39 1.45 1.42 1.33 1.19 9 SSSC 0.97 0.98 0.96 0.97 0.95

10 CITY 0.69 0.72 0.71 0.71 0.72 11 CEN 0.56 0.56 0.55 0.56 0.58 12 TMT 2.07 2.04 2.10 2.20 2.43 13 TIW 1.11 1.13 1.15 1.17 1.15 14 TGPRO 0.89 0.90 0.90 0.91 1.04 15 MAX 0.78 0.80 1.09 1.91 2.72 16 GJS 0.43 0.38 0.33 0.32 0.30 17 SAM 0.66 0.67 0.68 0.69 0.68 18 INOX 1.71 1.79 1.81 1.86 1.62 19 BSBM 0.82 0.82 0.82 0.83 0.85 20 PERM 1.76 1.79 1.86 1.94 2.10 21 MCS 2.57 2.58 2.54 2.58 2.59 22 THE 2.66 2.64 2.68 2.76 2.91 23 AMC 0.96 0.98 0.99 1.01 1.03 24 MILL 1.24 1.21 1.16 1.14 1.04 25 LHK 1.15 1.19 1.17 1.17 1.08 26 PAP 1.40 1.39 1.38 1.45 1.50 27 GSTEL 0.97 0.88 0.88 0.93 0.86

Average all 1.27 1.21 1.21 1.21 1.24

Remarks :P/BV started from July 14, 2017 The Independent Financial Advisor assigned equal weight for each company to calculate the average by disregarding the companies’ business size.

Source : SETSMART


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Summary of the GJS’s share valuation based on the Price to Book Value Approach

Historical Average Data Referred P/BV

Book Value as of March 31, 2017

Share Price

(Times) (THB) (THB)

Average P/BV for 15 business days 1.21 1.22 1.47 Average P/BV for 30 business days 1.21 1.22 1.48 Average P/BV for 60 business days 1.21 1.22 1.48 Average P/BV for 90 business days 1.24 1.22 1.51 Average P/BV for 180 business days 1.28 1.22 1.56

Average 1.23 1.22 1.50

Remarks: The Independent Financial Advisor assigned equal weight for each company to calculate the average by disregarding the companies’ business size.

The multiplication of the Price to Book Value Ratio by the book value as of March 31, 2017 derives the GJS’s share price of approximately between THB 1.47 – 1.56 per share.

The Price to Book Value Ratio Approach is an approach using the market price compared with the book value of its peers under the same business group. In addition, the approach is used to compare the price premium that the investors are willing to pay for a given book value of the business. Nonetheless, the Price to Book Value Ratio Approach does not reflect the true market value of the Company’s assets and its ability to generate income in the future. Thus, the Independent Financial Advisor believes that the approach can be used for comparison only.

4.2 Price to Earnings Per Share Ratio Approach (P/E Ratio) The Price to Earnings Ratio Approach is applying the GJS’s historical net income from the last 4 quarters started

in the first quarter of 2016 multiplied by the average Price to Earnings Ratio (P/E) of those listed companies in Subsection 4 . 1 . The average P/ E of the listed companies collected 1 5 – 1 8 0 days from July 14, 2017, which is the day that the Company’s Board of Director approved the Connected Transaction, retrospectively can be summarized below: (180 days period is enough to support the market fluctuation). The Independent Financial Advisor selects companies in Steel Sector for 27 companies as the comparable in order to show how many time the investors are willing to give a premium to the net income for Steel Sector. Nonetheless, because the companies in the Steel Sector may have some companies that have different business operation such as smelting iron industry, steel production industry, trading company, holding company, and they might have different product types. So, it is the limitation of the comparable approach.


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Summary of the Price to Earnings (P/E) of the 27 listed comparable companies

No. Symbol Average Historical P/BV (business days)

15 days 30 days 60 days 90 days 180 days 1 SSI N/A N/A N/A N/A N/A 2 TUCC N/A N/A N/A N/A N/A 3 RICH N/A N/A N/A N/A N/A 4 TWP 20.65 21.41 26.76 31.35 26.57 5 CSP 8.21 8.44 8.24 8.56 16.51 6 TSTH 38.79 38.05 30.62 24.24 19.51 7 TYCN 28.98 29.48 29.47 30.23 30.29 8 SMIT 14.56 15.17 15.01 14.08 13.44 9 SSSC 9.98 10.07 9.76 9.78 9.41

10 CITY 15.41 14.88 13.81 13.50 13.54 11 CEN N/A N/A N/A N/A N/A 12 TMT 7.19 7.09 7.08 7.18 8.10 13 TIW N/A N/A N/A N/A N/A 14 TGPRO 36.02 36.42 141.61 251.08 253.66 15 MAX 12.07 12.37 14.81 24.10 28.48 16 GJS 6.70 5.85 5.39 5.39 5.39 17 SAM N/A N/A 36.62 35.87 25.17 18 INOX 20.39 21.29 23.49 25.77 26.77 19 BSBM 6.83 6.80 6.59 6.46 7.31 20 PERM 4.86 4.96 4.93 4.98 16.09 21 MCS 7.31 7.34 6.85 6.62 7.09 22 THE 14.35 14.22 12.51 11.38 11.36 23 AMC 5.03 5.13 5.20 5.35 7.45 24 MILL 43.34 42.23 33.80 27.95 19.25 25 LHK 9.22 9.53 9.94 10.12 10.43 26 PAP 9.14 9.10 8.29 8.02 8.11 27 GSTEL 13.92 12.65 11.74 11.74 11.74

Average all (Exclude Outlier : TGPRO)

15.48 14.85 14.80 15.28 15.37

Remarks :P/E started from July 14, 2017 The Independent Financial Advisor assigned equal weight for each company to calculate the average by disregarding the companies’ business size. Excluding TGPRO in the calculation because the historical average of TGPRO from 60 days to 180 days is exceptional high which may affect the average to have high fluctuation.

Source : SETSMART


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The valuation approach has the calculation formula as follow:

Enterprise Value = P/E Ratio of Comparable Companies X Earnings per share for the last 4 quarters For the GJS’s ordinary share valuation by using the Price to Earnings Ratio Approach, the Independent Financial

Advisor has set July 14, 2017, which is the day that the Company’s Board of Director approved the Connected Transaction, as the day to calculate the historical average Price to Earnings Ratio (P/E). The Independent Financial Advisor calculates the P/E during the 15 – 180 business days retrospectively (180 days is a period that can sufficiently cover fluctuation). Net Income of GJS in the last 4 quarters has details below:

(Unit : THB million) Q2 / 2016 Q3 / 2016 Q4 / 2016 Q1 / 2017 Total Net Income 183.22 (30.16) (285.13) 967.26 835.19 Extra Profit *662.31 662.31 Net Income (exclude extra profit) 183.22 (30.16) (285.13) 304.95 172.88 Number of GJS shares 10,585,378,217 shares

Earnings per share of GJS (exclude extra profit)

THB 0.02 per share

Remarks : *According to the financial statements in Q1/2017 of GJS, the Company had the gain from the haircut of THB 662.31 million.

Summary of the GJS’s share valuation based on the Price to Earning Approach

Historical Average Data Referred P/E

Earnings per share of GJS for the last 4 quarters

Share Price

(Times) (THB) (THB) Average P/BV for 15 business days 14.85 0.02 0.30 Average P/BV for 30 business days 14.80 0.02 0.30 Average P/BV for 60 business days 15.28 0.02 0.31 Average P/BV for 90 business days 15.37 0.02 0.31 Average P/BV for 180 business days 15.33 0.02 0.31

Average 15.13 0.02 0.30

Remarks: The Independent Financial Advisor assigned equal weight for each company to calculate the average by disregarding the companies’ business size.

The multiplication of the Price to Earnings Per Share Ratio Approach (P/E Ratio) by the earning per share of GJS for the last 4 quarters started gives the GJS share price of approximately between THB 0.30 – 0.31 per share

The Price to Earnings Per Share Ratio Approach ( P/ E Ratio) is an approach reflecting the potential earnings of

the business in the short- run but it does not reflect the business performance in the future, thus, the approach can reflect only the price in the short- run not the true value of the business. In addition, the approach is used to compare the price premium that the investors are willing to pay for a given short- term earnings of the business. Nonetheless, the Price to Earnings Ratio Approach does not reflect the true market value of the Company’ s assets and its ability to generate income in the future. Thus, the Independent Financial Advisor believes that the approach can be used for comparison only.


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5. Discounted Cash Flow Approach (DCF) The valuation with this approach will reflect the GJS’s value by finding net present value of the cash flows in the

future. The Independent Financial Advisor considered the projected cash flows from the revenues, investment, and expenses that will incur in the future with the assumptions of the projection are as follow:

Assumptions on Information for the Cash Flow Projection from GJS The Independent Financial Advisor referred the key assumptions from information received from the Company

and the interview with the Company’ s management and advisor. The assumptions of the GJS’ s cash flow forecast are including the assumptions on expenses and investment projection from the current information received from the Company as the key assumptions.

Therefore, the valuation of the GJS’s value of the Independent Financial Advisor is conducted on the assumption that obtained information and documents are correct and true without any material change and considered from economy situation and information during the study period. If the above factors change from a present significantly, the Company may be affected by the changes and it may affect the valuation. Therefore, the Independent Financial Advisor’ s opinion could not confirm any material effect to the Company in the future and whether the Company and/ or its subsidiaries can achieve their business plan.

The GJS’ s financial projection has an objective to find the fair value of the GJS’ s ordinary share in order to compare to the offering price to ACO I for repay its trade debt under the Debt to Equity Conversion Scheme of THB 0.3400 per share, without any other objective or intention to influence the GJS’s share price.

Assumptions for the Projection The Independent Financial Advisor conducted the Company’s financial projection with the projected period of 5

years. (Since the Company does not have a plan to change its business operation concretely that will affect the Company’s operation, the 5 years period is sufficient to perform the cash flow projection of the Company that does not have the large business change) The cash flows used for the calculation start from the third quarter of 2017 onwards because GJS expects to obtain an approval from the shareholders’ meeting regarding the Connected Transaction for comparing. The financial projection is based on going concern basis of the GJS’ s business and there is no major change occurred and under the current economy and circumstance.


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Assumptions on Production Currently, GJS has the maximum capacity of 100,000 tons per month but GJS has suffered with the operating loss

from the Company’ s business for the last 3 years and with its low level of cash flow compared to the total liabilities in the Company’ s consolidated financial statements. According the above reasons, the Company has the limitation to seek for sources of fund from financial institutions to secure raw materials sufficient for its production continuously with the full capacity. Therefore, to save cost of electricity for smelting steel scrap, the Company currently chooses its production period during the low electricity usage ( Off Peak) which results that the Company can run its production of approximately 61 percent of the maximum capacity.

Time of Use Rate (TOU) Day Period No. of days

No. of hours %

Peak Monday – Friday 09.00-22.00 hrs 141.22 3,389 38.69

Off Peak

Monday – Friday 22.00-09.00 hrs 105.49 2,532

61.31

Saturday - Sunday Labor Day and National

Holiday (exclude substitution holiday and Royal Ploughing Day)

00.00-24.00 hrs 118.29 2,839

Total 365 8,760 100.00 Source : https://www.pea.co.th/

Based on the information above, the Independent Financial Advisor applied the GJS’ s production capacity of 61%.

The Independent Financial Advisor referred the average values of the 3-year historical information (2014 – 2016) to conduct the projection of Production Yield and production portion of Hot Rolled Coil (HRC). Details are as follow:

Production Historical Data Projection

2014 2015 2016 2017 2018 2019 2020 2021 2022

Production Maximum Capacity (million tons per year)

1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2

Utilization Rate (%)

56.44 59.95 61.11 61.00 61.00 61.00 61.00 61.00 61.00

Production Volume (million tons per year) (Maximum capacity x Utilization rate)

0.68 0.72 0.73 0.73 0.73 0.73 0.73 0.73 0.73

https://www.pea.co.th/


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Production Historical Data Projection

2014 2015 2016 2017 2018 2019 2020 2021 2022

Production Yield (%)

86.68 88.74 88.30 87.91 87.91 87.91 87.91 87.91 87.91

Production Portion of Hot Rolled Coil (HRC)

Ordinary Coil (%) 98.21 98.72 99.71 98.88 98.88 98.88 98.88 98.88 98.88 Skin Pass (%) 1.79 1.28 0.29 1.12 1.12 1.12 1.12 1.12 1.12

Maximum Capacity means the maximum capacity that the machine can produce in case it runs 100% and has no interruption.

Utilization Rate means the production utilization during a year on average.

Production Yield means the ratio of raw material input compared to the yielded products such as Production Yield = 87.91% means that 100 tons of raw material produce the Company’s products of 87.91 tons.

Ordinary Coil is hot steel plates which are rolling into coil. Skin Pass is ordinary coil which are back to a process of rolling again for smoothness and slim before rolling into coil.


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Assumptions on the Growth Rate of Selling Price and Raw Material Price The Independent Financial Advisor uses the Metals & Minerals Price Index from World Bank Commodities Price

Indices ( Update: June 26, 2017) historically since the year 1960 to forecast the growth rate of the selling price and the growth rate of raw material price because the Company’s products and raw materials are metal as well. Details are as follow:

Year

Metals & Minerals

Price Index

% Change

Year

Metals & Minerals

Price Index

% Change

Year

Metals & Minerals

Price Index

% Change

1960 66.22 1980 65.74 -0.18% 2000 48.08 15.56%

1961 63.38 -4.29% 1981 51.88 -21.08% 2001 44.90 -6.61%

1962 61.44 -3.06% 1982 45.61 -12.09% 2002 43.71 -2.64%

1963 62.98 2.50% 1983 55.76 22.26% 2003 46.26 5.82%

1964 73.63 16.92% 1984 51.22 -8.15% 2004 57.96 25.29%

1965 82.57 12.15% 1985 47.32 -7.61% 2005 68.53 18.24%

1966 84.15 1.91% 1986 41.30 -12.72% 2006 102.22 49.16%

1967 73.34 -12.85% 1987 47.95 16.11% 2007 113.30 10.84%

1968 77.44 5.60% 1988 70.44 46.91% 2008 99.41 -12.26%

1969 82.43 6.44% 1989 64.76 -8.06% 2009 70.93 -28.65%

1970 78.72 -4.50% 1990 54.84 -15.32% 2010 100.00 40.99%

1971 68.81 -12.58% 1991 47.09 -14.13% 2011 102.26 2.26%

1972 61.81 -10.18% 1992 44.72 -5.03% 2012 87.24 -14.69%

1973 69.58 12.56% 1993 37.24 -16.74% 2013 82.76 -5.13%

1974 70.95 1.97% 1994 46.06 23.70% 2014 78.49 -5.16%

1975 55.84 -21.30% 1995 51.09 10.92% 2015 68.57 -12.64%

1976 59.88 7.24% 1996 44.42 -13.05% 2016 67.16 -2.05%

1977 61.94 3.43% 1997 48.06 8.18%

1978 57.76 -6.75% 1998 41.09 -14.49%

1979 65.86 14.03% 1999 41.60 1.24%

Remark : Information from http://www.worldbank.org. Metals & Minerals Price Index referred prices of metal products which are Aluminum, Copper, Iron ore, Lead, Nickel, Tin and Zinc

http://www.worldbank.org/


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The Independent Financial Advisor applied the growth rate of the selling price and raw material price of 1. 22% which equals to the average historical growth of Metals & Minerals Price Index from 1960.

Assumption of the Selling Price Since steel products are commodity product, the price is relatively fluctuating ( based on the Metals & Minerals

Price Index from World Bank Commodities Price Indices Table). The Independent Financial Advisor set the selling price of the third quarter of 2017 equal to the actual selling price at present of approximately THB 18,000 per ton for Ordinary Coil and the price of Skin Pass will equal to the Ordinary Coil price plus the premium of approximately THB 800 per ton according to the Company’s current policy based on the interview with the Company’s management (Skin Pass is to process an ordinary coil into a process of rolling to make products slimmer) . The growth rate of the selling price will be 1. 22% according to the average growth rate of Metals & Minerals Price Index from World Bank Commodities Price Indices.

Selling Price of HRC

(THB/ton)

Historical Data Projection

2014 2015 2016 2017 2018 2019 2020 2021 2022

Ordinary Coil 21,652 16,801 16,161 18,000 18,219 18,441 18,666 18,893 19,123 Skin Pass 21,394 19,430 17,286 18,800 19,019 19,241 19,466 19,693 19,923 Growth rate (%) *-22.23 *-3.93 *11.41 1.22 1.22 1.22 1.22 1.22

Remark : *Weighted average growth

Assumptions of Cost of Sales

• Cost of Key Raw Materials Key raw materials include iron scraps and pig iron and HBI. The Independent Financial Advisor set the portion of raw material usage by referring the 3- year average historical data ( 2014 - 2016) . The Independent Financial Advisor uses the average price because the mix rate will be adjusted based on quality of raw materials acquired . If the pig iron has higher quality, the amount use will decrease and can increase iron scrap amount which is cheaper (pig iron is used to increase a pureness and quality of the Company’s products). Details are as follow:

Portion of Key Raw Materials


2014 2015 2016 2017 2018 2019 2020 2021 2022

Iron Scraps (%) 74.00 74.23 78.02 75.42 75.42 75.42 75.42 75.42 75.42 Pig Iron and HBI (%) 26.00 25.77 21.98 24.58 24.58 24.58 24.58 24.58 24.58


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Regarding the price of key raw materials, since a steel product is commodity product, the price is relatively fluctuating (referred the table of Metals & Minerals Price Index from World Bank Commodities Price Indicies). The Independent Financial Advisor set the raw materials of the third quarter of 2017 equal to the actual raw materials at present and the growth rate of the key raw material price will be 1. 22% according to the average growth rate of Metals and Minerals from World Bank Commodities Price Indices.

Cost of Key Raw Material


2014 2015 2016 2017 2018 2019 2020 2021 2022

Imported Pig Iron (USD/ton)

420 306 277 270.00 273.29 276.63 280.00 283.42 286.88

Import Iron Scrap (USD/ton)

402 330 276 268.13 271.40 274.71 278.06 281.46 284.89

Domestic Iron Scrap (THB/ton)

12,758 8,707 8,194 10,000 10,122.00 10,245.49 10,370.48 10,497.00 10,625.07

Growth Rate (%)

*-

29.43 *-

8.84 *4.96 1.22 1.22 1.22 1.22 1.22

Exchange Rate (THB/USD)

32.66 34.57 32.66 34.51 34.51 34.51 34.51 34.51 34.51

Remark : *Weighted average growth The exchange rate used in this document is the average foreign exchange rate used by commercial banks with their customers from May 2, 2017 to May 26, 2017 as announced by the Bank of Thailand. Please see further information from the website of the Bank of Thailand at (www.bot.or.th).

• Transportation cost of imported steel

The Independent Financial Advisor refers from the weighted average of the transportation cost of imported steel in 2017. The price will depend on costs of couriers in a particular period, oil price, and buying places. The growth rate of steel transportation costs which is based on the average inflation rate of Thailand of 3% per year.


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Cost of Key Raw Material

Historical Data Projection 2014 2015 2016 2017 2018 2019 2020 2021 2022

Weighted transportation cost of imported steel (THB/ton)

323.44 314.11 317.7 320.35 329.96 339.86 350.06 360.56 371.37

Growth Rate of transportation cost (%)

3.00 3.00 3.00 3.00 3.00 3.00

• Conversion Cost (exclude Depreciation)

Conversion cost includes chemical solution, electricity, gas, other plant expenses and machine maintenance cost. The Independent Financial Advisor applied the 3-year average historical data between 2014 - 2016 and the growth rate is based on the average inflation rate of Thailand of 3% per year. Details are as follow:

Conversion Cost Historical Data Projection

2014 2015 2016 2017 2018 2019 2020 2021 2022 Conversion Cost (exclude Depreciation) (THB/ton)

4,804 4,268 3,937 4,179.35 4,304.73 4,433.87 4,566.89 4,703.90 4,845.01

Machine Maintenance Cost (THB/ton)

124 145 202 157.10 161.81 166.67 171.67 176.82 182.12

Growth Rate (%)

3.00 3.00 3.00 3.00 3.00

Remarks: Conversion cost excluded depreciation because presently the Company has the working capital problem. Thus, the Company currently chooses its production period during the low electricity usage ( Off Peak) which results that the Company has to stop its production for many hours per day and it has a production clash. As the result, the restart of the production will require chemical products, electricity, gas, and other plant expenses higher than the normal operation. Consequently, the conversion cost will be higher. Based on the production level in 2014 – 2017, the Company can produced its products of 0. 68 million tons, 0. 72 million tons, and 0. 73 million tons, consecutively. When comparing with the conversion cost in the table above, the more the Company produces, the less the conversion cost until at a level that no matter how much the production increase, it will not safe this cost. However, the conversion cost during the projection period of the Independent Financial Advisor grows at the inflation rate.

Maintenance Cost In 2016, the Company has 2 major maintenance of 1. Water cool duct and 2. Thickness grade, as the result, the maintenance cost in 2016 is higher than normal.


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• Plant Fixed Cost Plant fixed costs include other fixed plant expenses and labor costs. The Independent Financial Advisor applied the current actual cost and the growth rate is based on the average inflation rate of Thailand of 3% per year. Details are as follow :

Other Plant Expenses Projection

2017 2018 2019 2020 2021 2022 Other fixed plant expenses (THB/month)

26,000,000 26,780,000 27,583,400 28,410,902 29,263,229 30,141,126

Labor cost (THB/month) 7,400,000 7,622,000 7,850,660 8,086,180 8,328,765 8,578,628 Growth Rate (%) 1.22 3.00 3.00 3.00 3.00 3.00

Assumptions of Selling and Administrative Expenses • Selling Expenses

The expenses include product transportation cost (dependent on location and fuel cost) and packaging expenses. The Independent Financial Advisor applied the actual figure in the past 3 years (2014-2016), which has the average of approximately THB 220 per ton.

• Administrative Expenses The Independent Financial Advisor applied the current actual figure, which is approximately THB 39,700,000 per month. The administrative expenses mostly (such as employee salary, utility excluding in the plant) are fixed cost, thus, the Independent Financial Advisor applies the actual expenses incurred currently for the projection.

The Independent Financial Advisor sets the growth rate of selling and administrative expenses by referring to the average inflation rate of Thailand of 3% per year.

Selling and Administr

ative Expenses


2014 2015 2016 2017 2018 2019 2020 2021 2022

Selling Expenses (THB/ton)

218 221 221 220 226.60 233.40 240.40 247.61 255.04

Administrative Expenses (THB/month)

39.00 39.42 36.75 39.70 40.89 42.12 43.38 44.68 46.02

Growth Rate (%)

1.22 3.00 3.00 3.00 3.00 3.00


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Assumption of Working Capital The Independent Financial Advisor interviewed the related people of the business. Details are as follow :

Items Days

Trade accounts receivable 7 Inventories 30

Trade accounts payable 45

Assumptions of Financing Cost According to the internal financial statements of the Company as of March 31, 2017, the Company has details of the interest-bearing debts as follow :

Items

Debt Outstanding

as of 31 May 17 (USD)

Debt Outstanding

as of 31 May 17 (THB)

Interest Rate (1)

Proportion of Debts

(2)

Net effect % of Interest Rate

(1)x(2)

Debt from other parties 18,500,000 8.00% 0.67% 0.05% Debt under the debt restructuring agreement

214,244,395 74.50% 7.75% 0.31%

Debt from ACO I 32,345,883 1,116,256,428 4.00% 40.39% 1.62% Debt from Link Capital I 41,000,000 1,414,910,000 12.00% 51.19% 6.14%

Total 2,763,910,823 100.00% 8.39%

Assumption of Depreciation The Independent Financial Advisor set the depreciation schedule of 20 years as the Company’s accounting

policy.

Assumption of Tax The Independent Financial Advisor set the corporate income tax of 20%.

Assumption on Capital Expenditure The Independent Financial Advisor set the capital expenditure of approximately THB 20 million per year during

2017 - 2021 based on the interview with persons related to GJS. The amount is close to its historical capital expenditure which includes investments in machine and equipment to maintain its current production capacity under the Company’ s present situation and the capital expenditure in 2022 will be approximately THB 150 million in order to maintain the Company’s situation and operation properly in the long run. (The projected capital expenditure by the Independent Financial Advisor is the expense from changing important spare parts only and excluded a purchase of new machine)


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Projection of the Company’s Profit and Loss

Year 2017 2018 2019 2020 2021 2022

Number of Month 3 12 12 12 12 12 Revenue (Production volume x Selling price per unit) 3,295.64 13,343.07 13,505.54 13,669.98 13,836.43 14,004.91 Cost of Key Raw Materials (Raw material volume x raw material price per unit) 1,976.87 8,000.13 8,093.90 8,188.81 8,284.88 8,382.12 Cost of Conversion exclude depreciation (Production volume x Conversion cost per unit) 754.08 3,106.10 3,198.56 3,293.79 3,391.89 3,492.93 Machine Maintenance Cost (Production volume x Maintenance cost per unit) 28.75 118.45 122.00 125.66 129.43 133.31 Other Plant Fixed Cost 24.70 98.78 98.78 98.78 98.78 98.78 Labor Cost 88.74 356.97 359.03 361.17 363.36 365.62 Selling and Administrative Expenses 159.36 656.56 676.26 696.55 717.44 738.97 Depreciation 235.14 941.19 942.19 943.19 944.19 945.19 Profit before Interest and Tax 28.00 64.89 14.81 -37.98 -93.55 -152.02 Interest -61.17 -242.77 -242.82 -242.86 -242.91 -242.96 Tax - - - - - - Net Profit -33.17 -177.88 -228.01 -280.84 -336.46 -394.98

Assumption of Cash Flow after the Projection Period (Terminal Value) The Independent Financial Advisor assumed that GJS will operate the business continuously in the future (Going

Concern Basis) and calculated by the Perpetuity Growth Model. Because during the projection period GJS still has problems with working capital management and if the situation remains the same in the future, it is difficult for GJS to grow after the projection period. Thus, The Independent Financial Advisor set the growth rate of the cash flow after the projection period of 0.00% per year.


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Assumption of discount rate (WACC) The discount rate used to estimate the present value of the future cash flow is calculated from the ( Weighted

Average Cost of Capital: WACC) of the business, which is formulated from : • Debt-to-Equity Ratio • Cost of Debt after tax: Kd*(1-t) • Cost of Equity : Ke

By using the following formula: WACC = Kd * (1-T) * (D/V) + Ke*(E/V)

Ke Rate of Return of Equity of 17.71% Kd Cost of financing of the company based on the average interest charge in the projection of 8.39% based on the

Company’s internal financial statements as of May 31, 2017. T Effective Tax Rate of 20% D/E The Company’s debt divided by equity of 0.43 times (D/E : 30/70) based on the Company’s internal financial

statements as of May 31, 2017. V Total Enterprise Value or Debt plus Equity

Ke is calculated by the following formula :

Ke = Rf + β(Rm – Rf)

Rf Yield of Government Bonds 3.37%

Referring to the 30- year Government Bond Yield as of July 11, 2017 from www.thaibma.or.th, which can reflect turn of long-term bonds

Rm Average Rate of Return of Stocks in the Stock Exchange of Thailand

13.95% Calculating the changes of the SET Index during the last 30 years from 1988 to 2017 (data from the Stock Exchange of Thailand) which can represent the market situations in different periods better than a short period information.

Β Coefficient of the Variance of the SET Index and the Stock Price

1.36 Average β of the listed companies in the Stock Exchange under Steel Sector of 25 companies (excluded SSI and TUCC because their shares are not traded, currently) for 1 year retrospectively from July 7, 2017.

WACC Weighted Average Cost of Capital of 14.41% and rounded the WACC to 14.50%.


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Projection of the Company’s Cash Flow unit : THB million 2017 2018 2019 2020 2021 2022 Number of Months 3 12 12 12 12 12

EBITDA 239.32 910.82 861.73 809.95 755.37 697.91 less Tax - - - - - - less Capital Expenditure -5.00 -20.00 -20.00 -20.00 -20.00 -150.00 add (less) change in working capital -9.78 12.95 13.33 13.71 14.11 14.52 Free Cash Flow to Firm 224.55 903.77 855.06 803.66 749.49 562.43 Cash Flow after the projection period (Terminal Value) - - - - - 4,017.35 Present Value of Cash Flow 224.55 789.32 652.21 535.37 436.06 2,256.72 Firm Value 4,894.22 add Cash in Financial Statements as of 31 Mar 17 675.62 less Liabilities in Financial Statements as of 31 Mar 17 2,872.86 Equity Value 2,696.98

Paid-up Capital of GJS 10,585.38 million shares Price per share THB 0.25

Sensitivity Analysis of the Valuation The Independent Financial Advisor has conducted the sensitivity analysis of the valuation in order to cover all

effects from the change of average growth rate of selling price and key raw material price because steel products are commodity product, the price is relatively fluctuate and cannot control. Thus, the Independent Financial Advisor has an opinion that the changes of the growth rate above of + / - 0. 5% are sufficient and can cover an average change that may occur. In addition, the sensitivity analysis will cover changes in the weighted average cost of capital (WACC) of +/- 0.5% because each investor may have different view to the risk from the investment and the WACC can be a representative of the investment risk. The Independent Financial Advisor has an opinion that the changes of the WACC of + / - 0. 5% are sufficient and can cover fluctuation that may occur. The analysis is follow.

Growth rate of selling price and key raw material price

WACC 15.00% 14.50% 14.00%

-0.5% from Average Growth 0.17 0.18 0.19 +0% from Average Growth (Base Case

1.22%) 0.24 0.25 0.27

+0.5% from Average Growth 0.31 0.33 0.35

Based on the Discounted Cash Flow Approach, the GJS’s shareholders’ equity is approximately THB 1,818.24 – 3,664.52 million or equivalent to approximately THB 0.17 – 0.35 per share.


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The Discounted Cash Flow Approach is the valuation approach that reflects the business value by finding the present value of the cash inflows from the business and subtracting with the cash outflows from expenses and tax in the future. The Independent Financial Advisor believes that the Discounted Cash Flow Approach is appropriate for the Company’s valuation because it can reflect the net cash flow that GJS expects to receive in the future.

Comparison of the GJS share price from the various approaches

Valuation Approach Value (THB per share) Remark

1. Book Value Approach 1.22 Not appropriate for the valuation 2. Adjusted Book Value Approach 1.80 Not appropriate for the valuation 3. Historical Market Price Approach 0.33 – 0.34 Appropriate for the valuation 4. Market Comparable Approach 4.1. Price to Book Value Ratio Approach

1.47 – 1.56 Not appropriate for the valuation

(can be used for comparison only) 4.2. Price to Earnings Ratio Approach

0.30 – 0.31 Not appropriate for the valuation

(can be used for comparison only) 5. Discounted Cash Flow Approach 0.17 – 0.35 Appropriate for the valuation

Each valuation approach has its pros and cons which can reflect an appropriateness of the Company’s share price as follow:

1. Book Value Approach considers a financial position at a certain point of time and an asset value is based on what is recorded in a financial statement only. It does not reflect a true market value of the asset and its capability to earn future profit. Thus, it is not appropriate for the valuation.

2. Adjusted Book Value Approach, although, adjusts net asset value by using market price prepared by an independent appraiser in order to reflect market value of a particular asset but it cannot reflect its capability to earn future profit, the approach can reflect net asset The Independent Financial Advisor believes that the Adjusted Book Value Approach is not appropriate for the valuation.

3. Historical Market Price Approach calculates a share price by referring from historical trading prices of its shares in the Stock Exchange of Thailand. If the investors in the normal market condition are able to buy/sell the securities at the desired volume and price, this approach can reflect the value of that particular security. Thus, the Independent Financial Advisor opined that the Historical Market Price Approach is appropriate for the valuation.


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4. Market Comparable Approach a. Price to Book Value Approach uses the market price of the company compared with the book value of

its peers under the same industry. Although, this approach takes into account the capability in generating the income in the future, it reflects the price premium that the investors are willing to pay for a given book value. Hence, the approach does not reflect a true market value of the asset and its capability to earn future profit. The Independent Financial Advisor applied the Price to Book Value Approach for comparing only.

b. The Price to Earnings Approach considers only the short- term income generating capability of the company rather the future profitability. Therefore, this approach can only reflect the short- term value of the company, not the true intrinsic value of the company. However, it can benefit investors by comparing its market price to its profitability as indicator of how much the price premium should be paid given a certain amount of profit within that short period of time. Nonetheless, the approach does not reflect the true value of assets and capability to generate income in the future. The Independent Financial Advisor applied the Price to Book Value Approach for comparing only.

5. The Discounted Cash Flow Approach takes into account the company’ s operation and capability to generate income in the future. It considers the present value of the company’ s expected future free cash flows based on the historical performance and also the economic prospect and company’ s potential in the future. If the company has concrete information and plan or can conduct financial projection close to its future operation enough, the Discounted Cash Flow Approach can reflect the true value of the company. Therefore, the Independent Financial Advisor believes that the approach is appropriate for this asset valuation.

Summary of Appropriate Fair Price of GJS

Appropriate Valuation Approach Valuation

(baht per share)


has opinion that the appropriate valuation approaches for the GJS’s shares are the Historical Market Price and the Discounted Cash Flow Approach (DCF) which derive the price of between THB 0.17 – 0.35 per share


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Comparison of the GJS’s fair value by the Independent Financial Advisor with the value of the Transaction

Price for Comparison Value

(THB/share) (1)

Fair Value of GJS by the

Independent Financial Advisor

(THB/share) (2)

Difference (1) - (2)

Price for comparison

higher (lower) than Fair Value of GJS by IFA (THB/share)

Opinions of the Independent Financial Advisor

* Market Price on the date that GJS’ s BOD approved

0.5272 0.17 – 0.35 0.1772 - 0.3572

The Independent Financial Advisor deems that the comparison of the price on the date that the GJS’s Board of Directors approved the Transaction is not appropriate because the market price includes the expectation that the Company should be able to solve its current financial problems. (Please see additional details in the Section 3 Valuation under the Subsection 3 Historical Market Price Approach)

Offering Price of Ordinary Shares for PP in the Transaction

0.3400 0.17 – 0.35 (0.01) - 0.17

The Independent Financial Advisor deems that the price of the Transaction is appropriate because it is in the appropriate valuation range evaluated by the Independent Financial Advisor.

* * Offering Price of Ordinary Shares for PP included benefits from the haircut and related WHT

0.3857 0.17 – 0.35 0.0357 - 0.2157

The Independent Financial Advisor deems that to compare with the Transaction price and the benefits the Company receives from the haircut and WHT is appropriate because the overall return from the Transaction is in the appropriate valuation range evaluated by the Independent Financial Advisor.

Remark : *Based on the weighted average closing price in the Stock Exchange for 7 consecutive business days prior to the date on which the Company’ s Board of Directors approved to propose the Company’ s offering of the newly issued ordinary shares under the Debt to Equity Conversion Scheme to the Extraordinary General Meeting of Shareholders from July 4, 2017 to July 13, 2017 of THB 0.5272.

**(Please see additional details in Section 2.1.6 Other Related Information may affect Shareholders under Subsection C. Comparison of the benefits that the Company earns from the Transaction)


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4. Summary of the Opinions of the Independent Financial Advisor 4.1 The Independent Financial Advisor’s Opinion regarding the Appropriateness of the Price

The Independent Financial Advisor has considered and opined that the Connected Transaction of the Company by allocating and offering of the Company’s newly issued ordinary shares to the SSG Group under the Debt to Equity Conversion Scheme has the fair value of approximately THB 0.17 – 0.35 per share, which can be summarized as follow:

Appropriate Valuation Approach Valuation (THB per share)


The Independent Financial Advisor has an opinion that since the Company expects to allocate and offer the Company’ s newly issued ordinary shares to the SSG Group to repay the trade debts under the Debt to Equity Conversion Scheme, the share price of THB 0.3400 per share is deemed to be appropriate because the transaction price is in the range of the fair value evaluated by the Independent Financial Advisor.

4.2 The Independent Financial Advisor’s Opinion according to Benefits, Cons and Risk Factors of the Company can be summarized as follow: Benefits or pros of the Transaction

1. Decrease the Company’s debt obligations The Company will be able to reduce its debt obligation via the conversion of debt to equity which can decrease the Company’ s debt of USD 32,934,250. 00 or equivalent to THB 1,1 3 6 ,5 3 5 ,345. 40. The debt reduction can be separated into the accrued trade receivable of USD 32,345,883 or equivalent to THB 1,116,231,264.42 and the accrued interest of USD 588,367 or equivalent to THB 20,304,087.55. In addition, the Company will receive the 1st portion of the interest waiver of USD 2,995,462 and the 2nd portion of USD 765,190 together with the related withholding tax of USD 663,644. The interest waiver will be effective immediately if the Debt to Equity Conversion Transaction is approved by the shareholders’ meeting of GJS which will result to the reduction of the withholding tax. Total benefits that the Company gains from the debt reduction are USD 37,358,546 or equivalent to THB 1,289,214,378. The Connected Transaction will reduce future interest burden since the conversion of debt to equity can relieve the Company’s debt.

2. Have Additional Financial Supports After entering the Connected Transaction, if the Company can fulfill all of the conditions under the Credit Agreement stated in the Section 1. 7 Conditions of the Transaction, the Company will have a right to drawdown additional loans from the SSG Group for capital expenditure, working capital, and other debt repayments of the Company because, currently, the Company experiences its operating loss from its business operation and has low level of cash flow from operating activities compared to the total liabilities according to the summary of Company’s financial statements, with the situation, the Company’s ability to find sources of funds from financial institutions is limited.

3. Increase the Production Efficiency After entering the Connected Transaction, if the Company can fulfill all of the conditions under the Credit Agreement of the SSG Group, the Company will have a right to drawdown additional loans from the SSG Group to maintain and improve its machine and equipment, which will enable the Company to run its production utilization of 100,000 tons per month or equivalent to 100 percent of its maximum capacity and will enhance the Company’s operation since presently GJS has insufficient working capital in order to secure raw material for its maximum capacity ( Maximum Capacity) . Therefore, to save cost of electricity for smelting steel scrap, the Company currently chooses its production period during the low electricity usage


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( Off Peak) which results that the Company can run its production of approximately 61 percent of the maximum capacity.


5. Increase Net Profit Margin The Company may have a superior net profit margin because of the reduction of its debt obligation which can lessen interest expenses immediately. Furthermore, since the SSG Group will hire the team of experts with experience and reputation in managing the world’ s leading companies in the steel industry in order to increase the Company’ s production and internal management efficiency, the Company should be able to decrease its production cost per unit and can manage its inventory more efficient. ( Please see additional details in Section 2. 1. 6 Other Related Information may affect Shareholders under Subsection B. Impacts to Statements of Financial Position from the Transaction)




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Cons of the Transactions

1. Effects to Shareholders After the Connected Transaction, the existing shareholders will be affected by the reduction of the share price ( Price Dilution) equivalent to 24. 00 percent of the holding portion, the dilution effect on the shareholding ratio (Control Dilution) equivalent to 8.52 percent and the dilution effect on the earnings per share (Earnings per Share Dilution) equivalent to 24.00 percent, theoretically.

2. The Company will not receive proceed from the capital increase Because the Connected Transaction is the allocation and offering of the Company’ s newly issued ordinary shares under the Debt to Equity Conversion Scheme, the Company, then, will not receive funds from the capital increase. However, the debt to equity conversion will reduce the Company’ s debt and, after the transaction, the Company will have a right to receive additional financial support from the SSG Group .

3. Increase the Company’s Interest Rate from Borrowing After the Connected Transaction, the Company will have a right to receive additional financial support from the SSG Group for capital expenditure, working capital, and other debt repayments of the Company. However, the loans from the SSG Group have the interest rate of 12 percent per year which is higher than current interest rates from financial institutions in general because the Company experiences its operating loss from its business operation and has low level of cash flow from operating activities compared to the total liabilities according to the summary of Company’ s financial statements, with the situation, the Company’ s ability to find sources of funds from financial institutions is limited.

4. Accounting Loss occurred After the Connected Transaction, the Company may suffer from an accounting loss because recognition of the difference between the fair value of the shares and the offering price under the Debt to Equity Conversion Scheme which will be recognized as an expense the debt restructuring according to the related accounting standard. The recognition of the item may incur more net accounting loss in its statement of comprehensive income. ( Please see additional details in Section 2. 1. 6 Other Related Information may affect Shareholders under Subsection B. Impacts to Statements of Financial Position from the Transaction)

5. Transaction is a connected transaction Although, presently, the SSG Group has no relationship with the Company, management, controlling person, or major shareholder of the Company and the Company has no management, controlling person, or major shareholders in the SSG Group, but after the Connected Transaction, the SSG Group will become a major shareholder of the Company, which will directly hold 24 percent of the total issued shares of the Company and indirectly hold 18.97 percent of the total issued shares of the Company through GSTEL (after registration of the Company’s paid-up capital)2524 Therefore, the transaction is deemed to be a connected transaction.

6. Conflict of Interest

24 25 If combining the Company’s capital increase due to the share allocation of the newly issued ordinary shares to accommodate the adjustment



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After the Connected Transaction, the SSG Group will be a major shareholder of the Company and The SSG Group is a group of juristic persons consisting of investment funds with proficiency in investing in companies with financial problems and distressed assets and a strong expertise in debt management and business turnarounds. Since the SSG Group is a fund and has many investments, it may invest in other companies that have businesses which conflict with the Company’ s business or it may invest in a company that may have conflict of interest with the Company in the future. Currently, the SSG Group has no transaction which has a conflict of interest with the Company.

Risk Factors 1. Approval of the GJS Shareholder Meeting to enter the Connected Transaction and waiver from the

requirement to make a tender offer for all securities of the business by virtue of the resolution of the shareholders' meeting (Whitewash)

An approval from the GJS Shareholder Meeting is one of the conditions before entering into the Connected Transaction together with the waiver from the requirement to make a tender offer for all securities of the business by virtue of the resolution of the shareholders' meeting (Whitewash). If the Company’s Shareholder Meeting does not approve the Connected Transaction or does not approve the waiver from the requirement to make a tender offer for all securities of the business by virtue of the resolution of the shareholders' meeting ( Whitewash) , the Company will not be able to convert debt to equity and will not receive any additional financial support from the SSG Group.



4. Risk from future takeover Because the SSG Group is a fund with investment period of approximately 5 – 7 years and when the investment period ends or the SSG Group can earn fair return which meets the fund’s policy, the SSG Group may sell entire or some shares of the Company to other investors. Nonetheless, if the SSG Group sell the Company’s shares entirely or in part to a group of investors more than 25.00 percent, the investors obliges to make a tender offer for all securities of the business by virtue of the resolution of the shareholders' meeting (Whitewash), which gives the Company’s shareholders an opportunity to consider together including the consideration to continue investing in the Company.


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4.3 Conditions for the Transaction and Opinion of the Independent Financial Advisor Summary of Conditions related to the Transaction Opinion of the Independent Financial Advisor

Conditions for the Connected Transaction 1. obtain approval for the Connected Transaction and the

waiver from the requirement to make a tender offer for all securities of the business by virtue of the resolution of the shareholders' meeting of the Company (Whitewash) from the shareholders’ meeting of the Company with votes of not less than three- fourths of the total votes of the shareholders attending the meeting and having the right to vote, excluding shareholders having interests

1. The Independent Financial Advisor deems that the condition is appropriate because it is a usual condition to propose the Company’ s shareholders’ meeting to have an involvement on the decision which may affect the shareholders. In addition, the waiver from the requirement to make a tender offer for all securities of the business by virtue of the resolution of the shareholders' meeting of the Company (Whitewash) may affect the Company’s organization structure and policy, thus, to enter the Transaction, it is necessary to propose to the shareholders' meeting for their decision and involvement to approve the Transaction.

2. obtain approval from the shareholders’ meeting of the Company with votes of not less than three- fourths of the total votes of the shareholders attending the meeting and having the right to vote, excluding shareholders having interests relating to the offering of the newly issued ordinary shares to a specific investor ( Private Placement) at an offering price with a discount of more than 1 0 percent of the market price without any objection on the proposed offering price by the shareholders with an aggregate shareholding of 10 percent of the total votes of the shareholders attending such meeting and having the right to vote.

2. The Independent Financial Advisor deems that the condition is appropriate because it is a usual condition to propose the Company’ s shareholders’ meeting to have an involvement on the decision since the offering of the newly ordinary shares to a specific investor (Private Placement) at an offering price with a discount of more than 10 percent of the market price may result to an effect to the shareholders from the dilution effect on the shareholding ratio ( Control Dilution) , the dilution effect on the market price of the shares (price dilution), and the dilution effect on the earnings per share (Earnings per Share Dilution) for than usual.

3. obtain permission for the offering of the newly issued ordinary shares to a specific investor ( Private Placement) from the Office of SEC before allocating and offering the newly issued ordinary shares of the Company to ACO I.

3. and 4. The Independent Financial Advisor deems that the condition is appropriate because it is a usual condition regarding related regulations.

4. file an application with the SET to list the newly issued

ordinary shares as securities in the SET. 5. obtain resignation letters from 4 directors of the Company

who are currently in office 5. and 6. The Independent Financial Advisor deems that the

condition has a risk because the persuasion the 4 current directors to resign from their director position of the Company and the appointment the 2 new directors ( including directors nominated by ACO I) together with the amendment of the authorized signatories of the Company may result to the risk that the Company has a chance to be controlled by the SSG Group which might affect the Company’ s policy and future business operation. However, after entering the Transaction, the SSG Group will be a major shareholder of the Company and it has an intention to

6. arrange for a Board of Directors’ meeting to approve the appointment of 2 directors ( including the directors to be nominated by ACO I) and the amendment of the authorized signatories of the Company.


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Summary of Conditions related to the Transaction Opinion of the Independent Financial Advisor obtain a waiver from the requirement to make a tender offer for all securities of the business by virtue of the resolution of the shareholders' meeting of the Company (Whitewash). In the 247-7 Form, the SSG Group announced that during the 12- month period the SSG Group has no plan to change the Company’ s business but the SSG Group will nominate new directors to hold more than half of the board seats, and will appoint executives to hold key managerial positions, including the Chief Executive Officer (CEO) of the Company. Consequently, the Company has the risk of the policy and management change.

7. receive consent or waiver from the Company’ s creditors for the Allocation and Offering of the Newly Issued Ordinary Shares of the Company under the Debt to Equity Conversion Scheme in the Section 1. 3 General Characteristics and Size of the Transaction in case such undertaking causes or may cause the Company to be in breaching of an agreement.

7. The Independent Financial Advisor deems that the condition is appropriate because it is a usual condition and can protect benefits of related parties, in this case is the Company’ s creditors, and it also protects the Company from lawsuit by the Company’s creditors.

Conditions for the Financial Assistance (additional) 1. The transfers of the debt ACO I purchased from the

previous trade creditors of the Company in the Section 2.1.3 Debt Restructuring Plan of the Company.

1. The Independent Financial Advisor has no opinion because ACO I purchased the debt from the Company’s 4 existing trade creditors and on February 10, 2017, ACO I sent the letter to the Company to confirm the debt outstanding transferred until January 31, 2017. This condition has been fulfilled.

2. The debt restructuring is completed within the 15-month period following the date of the 1 st Loan Portion utilization (the Company utilized the 1st Loan Portion on February 2, 2017).

2. The Independent Financial Advisor deems that the condition is appropriate because the condition provides the Company to have a certain timeline for its debt restructuring and benefits the Company and the SSG Group to reduce risks and expenses from its debt difficulty presently. However, if the shareholders’ meeting of the Company approves the debt to equity transaction ( the Connected Transaction) of the Company and the waiver from the requirement to make a tender offer for all securities of the business by virtue of the resolution of the shareholders' meeting of the Company ( Whitewash) , the condition will be fulfilled.

3. Link Capital I has completed its due diligence so as to determine the amount of capital expenditure and working capital necessary to increase the Company’ s production rate up to 100,000 tons per month and finds the result of the due diligence satisfactory Link Capital I.

3. The Independent Financial Advisor deems that the condition is appropriate because the condition provides the Company and the SSG Group to acknowledge require amount of proceed to increase the Company’ s production rate, moreover, it helps to mitigate additional expenses or misuse of fund. The increase of the Company’ s production rate will help the Company to utilize its existing machine more efficient which result to economy of scale.


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Summary of Conditions related to the Transaction Opinion of the Independent Financial Advisor 4. Link Capital I finds that the Company does not have an

alternative financial source for the capital expenditure and working capital necessary to increase its production rate up to 100,000 tons per month.

4. The Independent Financial Advisor has the opinion into 2 cases as follow: Case 1 If the Company has other funding options for capital expenditures and working capital necessary for enhancing the Company’s production rate to 100,000 tons per month.

Case 1. 1 Funding cost higher than the SSG Group’ s funding cost, the Independent Financial Advisor opines that it is not appropriate. Case 1. 2 Funding cost lower than the SSG Group’ s funding cost, the Independent Financial Advisor opines that it is appropriate.

Case 2 If the Company has no any other source of fund, the Independent Financial Advisor opines that it is not appropriate. Currently, the Company has fulfilled the condition and the Company has no other option for its capital expenditures and working capital for enhancing the Company’s production rate.

5. The Company shall provide Link Capital I with evidence for the capital expenditure and business operation for which the 2nd Loan Portion shall be utilized and Link Capital I finds such evidence satisfactory.

5. and 6. The Independent Financial Advisor deems that the condition is appropriate because the condition provides the Company and the SSG Group to acknowledge required amount of proceed and mitigate additional expenses or misuse of fund.

6. The Company shall provide Link Capital I with the debt repayment terms to its creditors in relation to other debts incurred in the Company’s business operation and Link Capital I finds such terms satisfactory.

7. The Credit Agreement contains conditions that may affect the shareholders’ rights in receiving dividends as the Credit Agreement specifies that the Company must obtain prior written consent from Link Capital I before any dividend distribution.

7. The Independent Financial Advisor has no opinion to this condition because the condition has pros and cons as follow:

Pros The requirement of a consent in advance from Link Capital I before any dividend payment will help the Company to recover and improve itself which might benefit the Company in a long run generally, moreover, it is a normal creditor’s condition to protect a right of creditors. Cons The consent from Link Capital I for any dividend payment will affect the shareholders to lose an opportunity to receive the dividend return.


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4.4 Summary of the Independent Financial Advisor’s Overall Opinions Based on the fair value of the Transaction and the benefits, cons and risk factors of the Transaction, the Independent Financial Advisor has the opinion that the Company’ s shareholders should approve the Connected Transaction because the conversion price under the Debt to Equity Conversion Scheme, approved by the Company’ s Board of Directors on July 14, 2017, of THB 0.34 per share is in the fair value range evaluated by the Independent Financial Advisor of approximately THB 0.17 – 0.35 per share. Therefore, the Independent Financial Advisor deems that it is an appropriate price considering effects, pros, and cons incurred from the Transaction.

If the Company Shareholder Meeting approves the Connected Transaction, the Company may have the risk from changes of the Company’ s policy because after the Connected Transaction, the SSG Group will be a major shareholder of the Company and have a right to nominate directors in GJS more than half of the total seats. As the result, it might affect the Company’ s policy in the future. In addition, the Company and the SSG Group may have inter- transactions in the future and the Company should be careful on rational, appropriateness of price, and fair condition before entering those transactions.

Moreover, the financial assistance from Link Capital I, a company in the SSG Group, has interest rate of 12% per year which is higher than current normal interest rates from financial institutions because the Company experiences its operating loss from its business operation and has low level of cash flow from operating activities compared to the total liabilities according to the summary of Company’s financial statements, with the situation, the Company’s ability to find sources of funds from financial institutions is limited. Thus, the Independent Financial Advisor has the opinion that if the Company can mitigate the limitation of its ability to find funding, the Company should refinance or find other sources of fund that have lower interest rate in the future.

Nonetheless, the Independent Financial Advisor believes that the SSG Group can convey the Company’s operation to earn better long- term profit since the SSG Group, to be the Company’ s major shareholders, has experiences to solve the Company’s financial and high debt level problems and has ability to give financial supports and business advices to the Company in the future. In conclusion, based on benefits, cons, risk factors, and other impacts with positive and negative influences, there is no crucial evidence to alter the Independent Financial Advisor’ s opinion to other views from the price aspect.


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However, the final decision whether to approve the Transaction rests with the Company’ s Board of Directors and shareholders. The Board of Directors and the shareholders can consider the opinion provided in the Independent Financial Advisor’s report above as a basis for making your decision.

Yours Faithfully


...................................................... (Mr. Pongsarun Tirmariyabuit)

Financial Advisor

............................................................................................................. (Mrs. UsanaphanVisutthisub and Mrs. Kanchana Kulteerathawat)

Directors


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Part 2 Information of G J Steel Public Company Limited

(GJS)


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Information of G J Steel Public Company Limited 1. General Information

Company Name G J Steel Public Company Limited Head Office address 88 PASO Tower, 24th Floor, Silom Road, Suriyawongse, Bangrak Bangkok 10500 Telephone 0-2267-8222 Fax 0-2267-9048 Website www.gjsteel.co.th Type of Business Industrials / Steel Registered capital 103,137,868,438.50 Baht Paid-up capital 73,039,109,697.30 Baht Number of ordinary shares 10,585,378,217 Shares and 6.90 Baht per share Business overview The Company produces hot rolled coil and downstream industries steel products which can

be divided as following: 1. Hot Rolled Coil 2. Tempered Hot Rolled Coil 3. Hot Rolled Pickled and Oiled Product

Source: www.set.or.th

2. Business Overview The Company produces hot rolled coil and downstream industries steel products which can be divided as following:

1) Hot Rolled Coil 2) Tempered Hot Rolled Coil 3) Hot Rolled Pickled and Oiled Product

These products will be used in the following industries as follows:

Type Adoption Hot Rolled Coil Engine tube, Electrical tube, Water pipe, Construction, C Channel,

Platform scaffolding, Power pole, Gas cylinder, Products that can resist corrosion from the atmosphere and Cold rolled steel

Tempered Hot Rolled Coil Agricultural tools, General construction, Structural steel sheet Hot Rolled Pickled & Oiled Product Chassis, Car wheel, Compressor, Refrigerator frames, Microwave

oven frames Source: Form 56-1



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3. Board of Directors, Management team, and Major shareholders Board of Directors The Company certificate, as of 14 July 2017, showed the names of 9 Board of Directors as follows:

Name Position

1 Mr. Yanyong Kurovat Chairman of the board

2 Mr. Ryuzo Ogino Chief Executive Officer / Director

3 Ms. Soontareeya Wongsirikul Director

4 Mr. Somchai Leeswadtrakul Director

5 Asst. Prof. Komol Wong-Apai Director

6 Mrs. Churairat Panyarachun Director

7 Assoc. Prof. Niputh Jitprasonk Chairman of Audit Committee and Independent Director

8 Assoc. Prof. Sukanya Tantanawat Member of Audit Committee and Independent Director

9 Mr. Michael Wyer Member of Audit Committee and Independent Director

Source: Information Memorandum concerning the Connected Transaction of G J Steel Public Company Limited

The Company management team The name of 7 member of the Company management teams, as of 14 July 2017 as follows:

Name Position

1. Mr. Ryuzo Ogino Chief Executive Officer 2. Khunying Patama Leeswadtrakul Chief CSR 3. Ms. Soontareeya Wongsirikul Chief Financial Officer 4. Mr. Somchai Leeswadtrakul Chief Government Liaison 5. Mr. Tushar Kanti Sahu Chief Commercial Officer 6. Ms. Methikan Chutipongsiri Chief Administrative Officer 7. Mr. Sittisak Leeswadtrakul Chief Operating Officer

Source: Information Memorandum concerning the Connected Transaction of G J Steel Public Company Limited


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Shareholders The top groups of the Company’s major shareholders as of July 11, 2017 are as follows:

Name Number of shares held % of total shares

1 G Steel Public Company Limited 2,122,427,209(1) 20.05%

2 Nomura Singapore Limited-Customer Segregated Account 1,086,456,038 10.26%

3 Ms. Jarunee Chinwongvorakul 567,800,000 5.36%

4 Quam Securities Company Limited A/C Client 523,768,667 4.95%

5 GS Security Holding Company Limited 520,000,000 4.91%

6 Superior Overseas (Thailand) Co., Ltd. 412,500,000 3.89%

7 Thai NVDR Co., Ltd. 187,951,907 1.77%

8 Mr. Suraphan Tatiyamaneekul 187,521,600 1.77%

9 Mr. Somchai Padpai 158,000,000 1.49%

10 The Hongkong And Shanghai Banking Corporation Limited, Singapore Branch

140,000,000 1.32%

11 Minority shareholders 4,678,952,796 44.20%

Total 10,585,378,217 100.00%

Note (1) GSTEL already sold 22 ,000 ,000 shares with an option to repurchase such shares to a third-party where the ownership over such shares was already transferred to the purchaser. But since the purchaser has not changed the name with the registrar of the Company's shares. As such, the Company's shares are still under the name of GSTEL. If the purchaser changes its name to the Registrar of the Company, GSTEL will hold 2,100,427,209 shares.


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4. Summary of Operation Results and Financial Analysis Information from the Separate Financial Statements of the Company ( Audited) for the Year Ended December 3 1 , 2014, 2015, and 2016; and for the Three-Month Period Ended March 31, 2017

4.1 Balance sheet of the Company (Unit: Thousand Baht)

Details Q1-2017 2016 2015 2014

Assets

Current assets Cash and cash equivalents 675,616 610,143 156,863 208,447 Trade receivable 245,848 195,960 215,083 199,721 Inventories 945,208 854,626 660,880 1,094,247 Short-term loans to related parties 13,000 - - - Other current assets 183,075 91,761 89,423 259,488 Total current assets 2,062,747 1,752,490 1,122,250 1,761,903 Non-current assets Long-term loans to and amounts receivable from related parties - - - 39 Investments in subsidiaries - - - - Advance payment for land, building and equipment 210,000 210,000 210,000 210,000 Land, plant and equipment 15,323,367 15,558,145 16,447,192 17,368,272 Intangible assets 7,396 7,807 9,166 24,273 Cash collateral for utilities - - - 252,000 Other non-current assets 306,574 284,427 211,728 216,375 Total Non-Current Assets 15,847,337 16,060,379 16,878,086 18,070,958

Total 17,910,084 17,812,868 18,000,336 19,832,861

Liabilities and shareholders' equity Total current liabilities Trade payables 624,103 2,039,409 2,045,165 2,240,066 Other payables and accrued expenses 765,630 1,238,899 1,185,770 1,343,421 Advance received from customers 142,828 190,096 177,731 306,835 Short-term loans from other parties 18,500 18,500 30,000 - Debentures due within one year - - - 640,800 Accrued interest 123,150 1,477,824 1,290,301 975,165 Liabilities under debt restructuring 1,269,050 - - -


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Details Q1-2017 2016 2015 2014 Liabilities under rehabilitation plan due within one year 217,603 225,734 241,817 244,211 Provisions - 72,240 - - Other current liabilities 34,738 35,076 34,975 33,370 Total current liabilities 3,195,602 5,297,778 5,005,759 5,783,868

Non-current liabilities Trade payables - - 14,600 - Other payables and accrued expenses 362,995 456,222 639,861 547,797 Long-term loans from other parties 1,386,203 - - - Debenture - 62,607 343,348 - Employee benefit obligations 55,743 53,982 47,458 37,197 Total Non-Current Liabilities 1,804,941 572,811 1,045,267 584,995

Total 5,000,543 5,870,589 6,051,026 6,368,863

Shareholders' Equity Share capital Registered share capital 103,137,868 103,137,868 103,137,868 129,979,834

Issued and paid-up capital 73,039,110 73,039,110 73,039,110 73,039,110 Warrants 147,992 147,992 147,992 147,992 Premium (discount) on ordinary shares (39,828,910) (39,828,910) (39,828,910) (39,828,910) Retained earnings Appropriated Statutory reserve 18,507 18,507 18,507 18,507 Unappropriated (20,628,847) (21,596,108) (21,589,078) (20,074,390) Other components of shareholders' equity 161,689 161,689 161,689 161,689 Total shareholders' equity 12,909,541 11,942,280 11,949,310 13,463,998

Total liabilities and shareholders' equity 17,910,084 17,812,868 18,000,336 19,832,861


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4.2 Profits and loss of the Company (Unit: Thousand Baht)

Detials Q1-2017 2016 2015 2014

Income Sale 3,526,019 11,669,472 12,260,382 14,513,000 The profit from the creditors reduce the debt. 622,312 - - - Exchange gains 141,725 53,612 - - Reversal of loss on diminution in value of inventories - - - 51,647 Gain on debt restructuring - 7,711 6,798 46,968 Other income 7,608 21,955 36,136 80,687 Total revenue 4,297,664 11,752,750 12,303,316 14,692,302

Expenses Selling cost 3,104,909 10,866,067 12,440,504 14,022,128 Cost of sales 43,292 159,814 160,699 152,693 Administrative expenses 119,020 529,147 564,383 731,980 Doubtful accounts and bad debt 3,156 1,292 39 - Exchange losses - - 337,727 28,377 Loss on impairment of assets - - 22,798 - Financial cost 60,026 203,461 291,854 175,305 Total cost 3,330,403 11,759,781 13,818,004 15,110,483

Profit (Loss) for the year 967,261 (7,030) (1,514,688) (418,181)

Other comprehensive income for the year - - - -

Total comprehensive income for the year 967,261 (7,030) (1,514,688) (418,181)

Earnings (loss) per share

Basic earnings (loss) per share

0.091

(0.001)

(0.14)

(0.04)


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4.3 Summary of major items in the financial statements and analysis of financial position and operating results of the Company

Statement of financial positions • Total assets

As of 31 March 2017, the Company has total assets amounted to THB 17,910 million which was nearly to the year ended 2016. Total current assets amounted to THB 2,063 million, increased by 18% from year 2016 and total non-current assets amounted to THB 1 5 ,8 4 7 million, decreased by 1 % from year 2 0 1 6 . The increased in current assets mainly derived from the increasing in cash and cash equivalent, trade account receivable, inventories and other current assets due to the Company has a reserved for working capital and the increasing in selling price of HRC in the Q1 -2017.

• Total Liabilities

As of 31 March 2017, the Company has total liabilities amounted to THB 5,000 million which decreased THB 870 million or 15% decreased from year ended 2016. This was a consequence of:

1. Long-term loan from other parties increased by THB 1,386 million in Q1-2017 for repayment the liabilities under debt restructuring regarding to the major 4 creditors has transferred all amount payable under the contracts to new creditor. In after the Company has repayment in a certain portion of debts (principal and accrued interests) and the new creditor has waived some portion of debts. As a result, the Company recognized a gain from the creditor reduce the debts in amounting to THB 622 million.

2. Accounts trade payable and others payable including accrued interest decreased from the year ended 2016 of THB 2,063 million, this was related to the increased in long- term loan from other parties as described in the preceding paragraph.

3. Debenture decreased from year ended 2 0 1 6 in amounted of THB 6 3 million due to the Company has redeemed the undue debenture.

4. Others payable and accrued expenses reduction from year ended 2 0 1 6 due to the repayment of tax installment payable.

• Total equity

As of 31 March 2017, the Company has total equity amounted to THB 12 ,910 million increased THB 967 million or 8% from year ended 2016 due to the net profit in Q1-2017 contributed.

Operating results The Company reported a net profit of THB 967 million and THB 125 million for Q1-2017 and Q1-2016 in respectively. The main results caused from:

• Revenue from sales and cost of goods sold The Company had total sales volume increased from 186,395 tons in Q1-2016 to 188,611 tons in Q1-2017, or sale volume increased by 1.2%. At the meantime, the average selling price increased from THB 15 ,179 per ton in Q1-2016 to THB 18,695 per ton in Q1-2017 or selling price increased by 23.2%. The Company had revenue from sales for Q1-2017 and Q1-2016 amounting to THB 3,526 million and THB 2 ,8 2 9 million in respectively, and had its gross profit amounted to THB 4 2 1 million and THB 2 1 7 million in respectively. The major factor contributing to the increase of gross profit was the increasing of HRC in the world market price.


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• Cost of goods sold - reversal of loss on devaluation of inventories In Q1-2016 the Company had recorded reversal of loss on devaluation of inventories of THB 9 million due to the increased average selling price.

• Selling expenses Selling expenses for the Q1 - 2 0 1 7 and Q1 - 2 0 1 6 amounting to THB 4 3 million and THB 4 0 million in respectively, with the amount was recorded at the same level.

• Administrative expenses Administrative expenses for the Q1-2017 and Q1-2016 amounted to THB 119 million and THB 106 million in respectively. The increased of administrative expenses of THB 1 3 million resulted from the consulting service fee and loss from write off the out off use machineries.

• Financial costs The Company had the financial costs for the Q1-2017 and Q1-2016 amounted to THB 60 million and THB 5 1 million in respectively. The increased of financial costs of THB 9 million resulted from the interest payable from new long-term loan from other parties in Q1-2017.

• Net foreign exchange gain The Company had a net gain on foreign exchange for the Q1 - 2 0 1 7 amounted to THB 1 4 2 million which higher than last year quarter by THB 49 million, derived from the strengthen of the Thai Baht against the US dollar.

• Gain from the creditor reduce the debts In Q1 - 2 0 1 7 the Company had recognized gain from the creditor reduce the debts ( from a major creditor) amounted to THB 622 in after the Company had repayment in a certain portion of debts.

4.4 Financial Ratios 2014 2015 2016 Q1 2017 Liquidity Ratio Current ratio (time) 0.30 0.22 0.33 0.65 Quick ratio (time) 70.95 59.11 56.78 63.85 Cash ratio (time) 5.14 6.17 6.43 5.72 Account receivable turnover (time) 14.11 14.12 14.26 13.80 Average collection period (day) 25.88 25.85 25.59 26.45 Inventory turnover (time) 8.04 5.81 5.32 9.33 Average selling period (day) 45.39 62.86 68.60 39.14 Account payable turnover (time) -14.37 -30.84 -36.58 -6.97 Profitability Ratio Gross profit margin (%) 3.38 -1.06 7.38 11.94 Operating profit margin (%) -2.71 -6.97 1.47 7.34 Other profit margin (%) -2.85 -12.31 -0.06 22.51 Cash to profitability ratio (%) -3.06 -11.92 -0.06 31.14 Efficiency Ratio Return on assets (%) -0.02 -0.08 0.00 0.05 Financial Ratio Debt to equity ratio (time) 0.47 0.51 0.49 0.39


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Information of SSG Capital Management (SSG)


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1. Information of SSG Capital Management

Name SSG Capital Management Head Office address Rooms 4202-4204, 42/F, Gloucester Tower, The Landmark, 15 Queens Road Central,

Central, Hong Kong Telephone +852-3909-8888 Fax +852-3909-8808 Website www.ssgasia.com Business overview The SSG Group is an alternative asset management firm which focuses on investing in the

credit and special situations space in Asia Pacific region.

2. Business Overview The SSG Group is an alternative asset management firm which focuses on investing in the credit and special

situations space in Asia Pacific region. At present, the SSG Group has approximately USD 3 . 4 billion of assets under management with offices / affiliates in Hong Kong, Singapore, Mumbai, Mauritius, Jakarta, Shanghai, New Delhi and Bangkok.

The SSG Group has over 6 5 employees across Asia with majority of such staff based in its Hong Kong and Singapore offices. SSG’ s core investment geographies include Thailand, Indonesia, India, China, Australia and other countries in the Asia Pacific region.

SSG’ s achievements have been recognized through several industry awards over the past years, including awards from Private Equity International for “Distressed/Special Situations Firm of the Year in Asia” in 2016, 2015 and 2014 , from Private Debt Investor for “ Distressed Debt Investor of the Year, Asia Pacific” and “ Fundraising of the Year, Asia Pacific” in 2016 , 2015 and 2014 , “Lender of the Year, Asia Pacific” in 2016 and 2015 , and “Real Estate Debt Fund Manager, Asia Pacific” in 2015. It has previously won the Investment Performance Awards from Asian Investor in 2013, 2012 and 2011.

Over the past 2 0 years, SSG has been active in pursuing opportunities which involve balance sheet restructuring, significant capital commitments and implementation of turnaround across Asia. The team has played an instrumental role in several special situations, turnaround, restructuring and structured financing opportunities .


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3. Registered capital, Paid-up capital and Shareholding Structure As of 3 0 June 2 0 1 7 , Asia Credit Opportunities I ( Mauritius) Limited has registered and paid- up capital of US$

3,527,629. List of recent board members as of June 30, 2017

Name Position Mr. Roshan Nathoo Director

Mr. Vishwanand Nursimlod Director Mr. Ranjan Lath Director

Source: Draft form 247-7

List of shareholders 25 with the top ten amounts 26 of shares of Kendrick Global Limited, which is the latest information as of 30 June 2107.

Percentage of Percentage of

Name Number of

shares total sold shares of voting rights of

SSG27 SSG28

Kendrick Global Limited 3,527,969 100% 100% Source: Draft form 247-7

List of shareholders with the top ten amounts of shares of Kendrick Global Limited, which is the latest information as of 30 June 2107.

Percentage of Percentage of

Name Number of

shares total sold shares of voting rights of

SSG29 SSG30

SSG Capital Partners III, L.P. 100 100% 100% Source: Draft form 247-7

25 Such shareholding shall include shares held by the persons under Section 258, and the persons under the same person with power

of control. 26 In case any shareholder according to the above list of the top ten shareholders is a shareholder who, by circumstances, has m aterial

influence over the policy making, management or operation of the Applicant (such as, designation of any person of the Applicant as an authorized director) and has other person as the ultimate shareholder (such as, the shareholder whose status is a holding company or nominee account), the name of the person who is the ultimate shareholder and the nature of business of such person shall be specified.

27 The total number of outstanding shares of the Applicant = ordinary shares + preferred shares – shares repurchased and outstanding at the end of a month prior to the month in which the application for a waiver is submitted to the Office.

28 The total voting rights of the Applicant = the voting rights of the total number of outstanding shares of the Applicant. 29 The total number of outstanding shares of the Applicant = ordinary shares + preferred shares – shares repurchased and outstanding

at the end of a month prior to the month in which the application for a waiver is submitted to the Office . 30 The total voting rights of the Applicant = the voting rights of the total number of outstanding shares of the Applicant.


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Shareholding Structure of SSG Group

Note 1. Ching Him Wong (holds 62.75 percent voting rights) , Shyam Maheshwari (holds 18.625 percent voting rights) , and

Andreas Rizal Vourloumis (holds 18.625 percent voting rights) collectively hold equity voting shares in SSG CH in an aggregate amount of 1 0 0 percent. SSG CH owns 1 0 0 percent equity voting shares in SSG Capital Partners III GPGP, Ltd. (“SSG GPGP”), which is the general partner of SSG Capital Partner III GP, L.P. (“SSG GP”). SSG GPGP has its own investment committee and independent directors who have management control over SSG III’s operations.

2. SSG III is a Cayman Limited Partnership and is a collective Investment Fund which has capital commitments from the external investors who are limited partners (98.36 percent) and SSG GP (1.64 percent). SSG GP is the general partner of SSG III whereas the limited partners are essentially financial investors in SSG III and have no involvement with the operations of SSG III and do not have any relationship with the Company which would make them being considered as connected persons of the Company. Specific details of the limited partners cannot be disclosed to public as they are prohibited under confidentiality agreements.

3. Link Capital I and ACO I are limited companies in the form of SPV for investment of SSG Group . The SSG Group determines Link Capital I to invest as a secured creditor and invest as an unsecured creditor. To facilitate the management and classification of investments. In addition, the investment of the SSG Group does not invest in a manner that is Conflict of Interest with the Company and GSTEL


107

KG Company Name Kendrick Global Limited Head Office address P.O. Box 957, Offshore Incorporation Centre, Road Town, Tortola, British Virgin Islands Incorporated under the law British Virgin Islands Date of registration June 28, 2016 Nature of business Run an investment business of SSG group Registered capital 100 USD Par value 1 USD per share Shareholding Structure SSG III directly holds 100% of shares33

Directors 1. Vishwanand Nursimloo 2. Frank Bernard Balderamos 3. Jeffrey Ishmael Andre Goddard

ACO I Company Name Asia Credit Opportunities I (Mauritius) Limited Head Office address Globefin Management Services Ltd. , 1st Floor Anglo- Mauritius House, Intendance Street,

Port Louis, Mauritius Incorporated under the law Republic of Mauritius Date of registration April 22, 2016 Nature of business Special Purpose Vehicle ( SPV) for investment by SSG Group ( deposited in Unsecured

Group) Registered capital 3,527,969 USD Par value 1 USD per share Shareholding Structure Kendrick Global Limited directly holds 100% of shares3431 Directors 1. Roshan Nathoo


Link Capital I Company Name Link Capital I (Mauritius) Limited Head Office address Globefin Management Services Ltd. , 1st Floor Anglo- Mauritius House, Intendance Street,

Port Louis, Mauritius Incorporated under the law Republic of Mauritius Date of registration June 29, 2016 Nature of business Special Purpose Vehicle ( SPV) for investment by SSG Group ( Invested as Guaranteed

Creditors) Registered capital 20,501,000 USD Par value 1 USD per share Shareholding Structure Kendrick Global Limited holds 100% of shares35 Directors 1. Roshan Nathoo


33 Please see SSG Group Shareholding Structure. 34 Please see SSG Group Shareholding Structure. 35 Please see SSG Group Shareholding Structure.


108

Proportion of Investors in SSG

Fund III LP Capital Commitment (USD) % Number of investors

Asia 140,050,000 15.3% 9

Endowment 45,000,000 4.9% 2 GP 15,050,000 1.6% 1 HNWI 6,500,000 0.7% 3 Institutional Family Office 3,500,000 0.4% 1 Insurance 30,000,000 3.3% 1 Sovereign Wealth 40,000,000 4.4% 1

Europe 243,700,000 26.6% 17

Corp Pension 13,700,000 1.5% 2 Endowment 45,000,000 4.9% 2 FoF 35,000,000 3.8% 2 HNWI 2,000,000 0.2% 1 Institutional Family Office 58,000,000 6.3% 5 Insurance 57,000,000 6.2% 3 State Pension 33,000,000 3.6% 2

Middle East 155,000,000 16.9% 3

Corp Pension 50,000,000 5.5% 1 Institutional Family Office 5,000,000 0.5% 1 Sovereign Wealth 100,000,000 10.9% 1

US 376,250,000 41.1% 16

Corp Pension 25,000,000 2.7% 1 Endowment 20,000,000 2.2% 1 FoF 32,000,000 3.5% 3 HNWI 5,000,000 0.5% 1 Institutional Family Office 56,750,000 6.2% 3 State Pension 237,500,000 26.0% 7

Grand Total 915,000,000


109

4. Relationship between SSG and GJS Currently, ACO I, a wholly-owned subsidiary of SSG, has no relationship with the Company. Or major shareholders

of the Company and the Company have no management. Controlling Authority Or major shareholders together with SSG Group

But after the allocation and offering of the Company's newly issued ordinary shares Under the Debt- to- Equity Conversion Scheme, the SSG Group will become a major shareholder of the Company. The direct shareholding of 24.00% of the total issued shares of the Company. And indirectly through GSTEL 18.97% of the total shares sold of the Company. (After the registration of the increase of the Company's paid-up capital)36 32, and will nominate more than half of the member of directors to be the Company's directors. Including the CEO position of the company.

In addition, the SSG Group is also the commercial creditor of the Company through the acquisition of four major commercial creditors, Stena Fragmentering AB, Duferco Asia Pte Ltd. , Intergate AG and Stemcore ( SEA) Pte. The total amount is US $ 90,159,338.

5. The person under Section 258 of the SSG Group, who is the shareholder of the business Currently, the SSG Group does not hold shares in the business. SSG is expected to acquire shares in G Steel Public

Company Limited ("GSTEL") from a debt-to-equity conversion of a significant number of shares on the same day that the SSG Group will acquire. New shares in the business or any other similar day. This will cause the SSG Group to make a tender offer for GSTEL. Acquisition of the GSTEL shares will result in GSTEL and GS Securities Holdings Company Limited ( a subsidiary of GSTEL) becoming a related person to the SSG Group. Pursuant to Section 258 of the Securities and Exchange Act BE 2535 ( as amended) . The shareholding structure in G Steel and GS Securities Holdings Company Limited Manual on July 11, 2017, are as follows.

Company Name Stock type Number of shares

held

Percentage of total paid-up shares of the

business

Percentage of total voting rights of the

entity GSTEL Ordinary 2,122,427,209 20.05 20.05 GS Securities Holdings Company Limited Ordinary 520,000,000 4.91 4.91 Total 2,642,427,209 24.96 24.96

32 36 Including the registration of the Company's paid-up capital. As a result of the allotment of new ordinary shares to accommodate the

adjustment of the rights of the Company's warrants, under the assumption that all of the warrants are exercised, ACO I will b ecome the major shareholder of the Company. By holds 17.84% of the Company's paid-up shares directly. And indirectly through GSTEL 22.48% of the total shares sold of the Company.


110

Part 3

Details of the appraised asset

By American Appraisal (Thailand) Ltd.,


111

Details of the appraised asset by American Appraisal (Thailand) Ltd., Land with buildings and machinery

Customer's name G J Steel Public Company Limited Type of asset 494 rai 1 ngan 67 square wah land improved parcel with 8 building and 16 Machinery Location 358 Moo 6, CIE 3 Road, Chachoengsao-Sattahip Road (Highway No. 331, between Kilimeter

Stations 42-43) Borwin Sub-district, Sriracha District, Chonburi Province Appraisal purpose For accounting and public purposes Appraisal method Cost approach for building and machinery

Market Approach for land Obligation All the land, Except for title deed No. 87915 is first mortgage with Ministry of Finance, Siam

City Bank Public Company Limited and Sukhumvit Asset Management Company Limited and second mortgage with Link Capital One (Mauritius) Limited.

Market value 17,852,000,000 Baht Appraisal date May 31, 2017


112


Release date of valuation report

June 14, 2017

Opinion of the Independent Financial Advisor

Land The Independent Appraiser used the Market Approach to value the asset, which has Comparative Analysis and Modifiable Factors such as location and land size for calculating a value of asset . The Market Approach is appropriate for the asset type. The comparative information is located near the asset. The Independent Financial Advisor deems that the market information is same type with the asset. Conclusion the Independent Financial Advisor deems that the asset value is appropriate according to the current conditions. Building and Land Improvements The Independent Appraiser used the Cost Approach to consideration of Material price, labor cost or current construction price to find new replacement cost. Then bring the new replacement cost to deduct with depreciation of the asset’ s life. The examination of The Independent Financial advisor, the asset is office building and warehouse with other building. The asset has a building age around 13 - 21 years. Building condition is normal. Conclusion the Independent Financial Advisor deems that the value the asset is appropriate according to the current cost of construction and deducted with depreciation of the asset’s life. Machinery with Equipment The Independent Appraiser used the Cost Approach to value the asset, to consideration of current new equipment price to find new replacement cost. Then bring the new replacement cost to deduct with depreciation of the asset’s life.

Conclusion the Independent Financial Advisor deems that the value the asset it may not be appropriate due to the Independent Appraiser’s

The Independent Financial Advisor has the opinion that the value of the machine and equipment may not be appropriate because the Independent Appraiser has evaluated based on the assumption that during the plant shut down for 5 years and 8 months, the machine and equipment were maintained properly and the Independent Appraiser applied the depreciation in the plant shut down period only 5 0 percent of normal depreciation. Moreover, resulting from the plant shut down, the Independent Appraiser increased the remaining useful life of machine and equipment for half of the shutdown period. The Independent Financial Advisor deems that the decrease of depreciation and increase of useful life of the machine and equipment may overestimate the valuation of the machine and equipment compared to their existing condition.


113


Map


114

Summary of assessed property prices by American Appraisal (Thailand) Ltd.,

• Land valuation

List Document

Area

Obligation Rai Ngan

Square wah

68083

Deed

82 1 69

Mortgage with Link Capital One (Mauritius) Limited, Ministry of Finance, Siam City Bank Public Company Limited and Sukhumvit Asset Management Company Limited.

72240 52 1 13 72242 36 1 31 72243 11 2 87 72246 26 3 57 77402 18 1 55 77403 37 - 16 77404 19 1 48 77405 32 - 74 77406 51 1 93 77407 9 2 15 78239 22 - 49 78240 16 2 13 78241 16 2 17 87915 3 1 64 No obligation

255 Nor sor 3

kor

46 3 76 Mortgage with Link Capital One (Mauritius) Limited, Ministry of Finance, Siam City Bank Public Company Limited and Sukhumvit Asset Management Company Limited.

125 (737) 11 - 90

Total area 494 Rai 1 Ngan 67 square wah (197,767 square wah)

Land price 1,800,000.00 Baht/Rai Total 890,000,000.00 Baht


115

Comparative information

List Appraised assets Comparative information

Data 1

Property type Land Vacant Land Area 494.4175 Rai More than 10 rai

Location 358 Moo 6 CIE 3 Road, Hemaraj Chonburi

Industrial Estate, Chachoengsao-Sattahhip Road (Highway No. 331)

Eastern Seaboard Industrial Estate, Chachoengsao-Sattahip Road (highway No. 331)

Grade Slopes downwards to the fronting road at the level with the grade of the fronting road Access road 8-meter asphalt road way 8-meter asphalt road way Facilities electric power, running water and telephone Electric power, Running water and Telephone Current Use Industrial Vacant

Compare with appraised assets Location is nearby the asset. Land size is lower than

the asset. Selling Price 3,900,000 Baht Data source Khun Rungruethai 02-719-9555-9 Value Adjustments Description Adjust

Transaction Type Offer for sale -10% Sale Date End of year 2016 0%

Total -10% Adjusted value (Baht/Rai) 3,510,000.00 Location Comparable 0% BOI Zone Comparable 0% Land area Superior -35% Grade Superior -5% Shape/Frontage Comparable 0% Access Road Comparable 0% Facilities Comparable 0% Zoning Comparable 0% Current Use/Potential Use Comparable 0%

Total Physical Adjustments -40% Final Adjust value (Baht/rai) 2,106,000.00

Weight level 100% 40% Fair Market Value (Baht/rai) 1,777,950.00 842,400.00

Rounded To (Baht/rai) 1,800,000.00


116

Comparative information – (Cont.)

List Comparative information Comparative information

Data 2 Data 3

Property type Vacant Land Vacant Land Area More than 10 rai More than 10 rai

Location Hemaraj Eastern Seaboard Industrial Estate,

Chachoengsao-Sattahip Road (highway No. 3138) Amata City Industrial Estate, Chachoengsao-Sattahip

road (Highway No. 331) Grade at the level with the grade of the fronting road at the level with the grade of the fronting road Access road 8-meter asphalt road way 8-meter asphalt road way Facilities Electric power, Running water and Telephone Electric power, Running water and Telephone Current Use/Potential Use Vacant Vacant

Compare with appraised assets Location is better than the asset. Land size is similar

the asset. Location is nearby the asset. Land size is over than

the asset. Selling Price 3,900,000 Baht 3,800,000 Baht Data source Khun Rungruethai 02-719-9555-9 Khun Chattrakarn 02-318-0007 and 038-346-007 Value Adjustments Description Adjust Description Adjust

Transaction Type Offer for sale -10% Offer for sale -10% Sale Date June 2017 0% June 2017 0%

รวม -10% -10% Adjusted value (Baht/Rai) 3,510,000.00 3,420,000.00 Location Superior -5% Superior -5% BOI Zone Superior -10% Superior -10% Land area Superior -35% Superior -35% Grade Superior -5% Superior -5% Shape/Frontage Comparable 0% Comparable 0% Access Road Comparable 0% Comparable 0% Facilities Comparable 0% Comparable 0% Zoning Comparable 0% Comparable 0% Current Use/Potential Use Comparable 0% Comparable 0%

Total Physical Adjustments -55% -55% Final Adjust value (Baht/rai) 1,579,500.00 1,539,000.00

Weight level 30% 30% Fair Market Value (Baht/rai) 473,850.00 461,700.00

Summary of independent appraisal

List Appraised assets Comparative information Comparative information Comparative information Data 1 Data 2 Data 3

Final Adjust value (Baht/Rai) 2,106,000.00 1,579,500.00 1,539,000.00 Weight level 100% 40% 30% 30% Market price (Baht/Rai) 1,777,950.00 842,400.00 473,850.00 461,700.00 Round to (Baht/Rai) 1,800,000.00


117

• Valuation of building

Asset list Duration of

service (Year)

Area (Square meter)

Appraised value

( Baht / Units )

Replacement value (Baht)

Value by condition

(Baht)

1. Office building 21 1,700.00 16,300 27,700,000 14,543,000 2. Canteen 18 300 5,400 1,620,000 972,000 3. Warehouse 24 3,600 5,400 19,400,000 11,640,000 4. Finish Building 21 49,461 18,400 910,100,000 477,803,000 5. Hot Mill, Coil Yard, Tunnel Furnace, Melting and Casting Building

22.9 75,202 22,776

1,712,800,000 899,220,000

6. Scrap Bay Building no.1 and 2 22.9 8,664 10,200 88,400,000 46,410,000 7. Coal and Iron Ore Storage 12.8 11,085 2,100 23,300,000 8,543,000 8. Acid Regeneration Building 28.9 3,320 8,200 27,200,000 18,360,000

Total Appraised value (Round) 2,810,500,000 1,477,491,000

• Land Improvements

Asset list Duration of

service (Year)

Area (Square meter)

Appraised value

( Baht / Units )

Replacement value (Baht)

Value by condition

(Baht)

1. Roadway and Drainage - 42,000 850 35,700,000 10,700,000 2. Land Fill - 50,000,000 50,000,000

Total Land improvement (Round) 85,700,000 60,700,000


118

• Valuation of Machinery with Equipment

Asset list In Service

(Year) Useful life

(Year) Replacement value

(Baht) Value by condition

(Baht) 1. DRI Plant 1998 25 1,980,000,000 39,600,000 2. Melting Line and Casting Line 1998 25 7,764,000,000 3,066,800,000 3. Hot Strip Mill Line 1998 25 11,860,000,000 4,684,700,000 4. Pickle Galvanize Line 1998 25 6,144,000,000 2,824,000,000 5. Push Pull Pickling Line 2009 25 2,076,000,000 1,658,700,000 6. Recoil Temper Mill Line 2006 25 818,000,000 555,400,000 7. Acid Regeneration Plant 2009 25 277,000,000 221,300,000 8. Cold Reduction Mill Line (ZRM) 2009 25 1,617,000,000 1,125,400,000 9. Chemical Lab (for Melting Line) 1998 15 34,000,000 12,400,000 10. Physical Lab (for Hot Mill Line) 1998 15 132,000,000 48,200,000 11. Roll Shop 1998 20 530,000,000 193,000,000 12. Baghouse Section 1998 20 442,000,000 174,600,000 13. Weighing Station 1998 20 34,000,000 12,400,000 14. Electrical Distribution System 1998 25 860,000,000 356,900,000 15. Water Treatment System 1998 20 900,000,000 450,000,000 Total Appraised value (Round) 35,468,000,000 15,423,400,000

Formula for evaluate the machinery From formula FMV = RCN x P x F x E By FMV = Cost estimate / Appraisal Value

RCN = New purchase value, Rebuild, New replacement value / Cost of Reproduction New P = Utility depreciation F = Functional Obsolesce E = Economic / External Obsolesce

From formula P = (1 – n / N) x C By P = Utility depreciation

n = Chronological Age N = Physical Life C = Condition Factor

The Independent Appraiser has assessed the effects of a factory shut down for a period of 5 years and 8 months on the assumptions that the Machinery with proper care during that time. The Independent Appraiser was depreciated at the plant shutdown for a period of 5 years and 8 months, only 50% of the normal depreciation.

Also, by closing the plant above, the Independent Appraiser has increased the remaining life of the Machinery with half of the plant closure.

Opinion of the Independent Financial Advisor on the Waiver from Making a Tender Offer for All Securities of the Business by the Resolution of the Shareholders' Meeting (Whitewash)

For

G J Steel Public Company Limited

Prepared by

JVS Financial Advisory Company Limited August 8, 2017


Table of Contents

Executive Summary ....................................................................................................................................................... 6 The Independent Financial Advisor’s Opinion ............................................................................................................. 6 Summary of the Independent Financial Advisor’s Overall Opinions ......................................................................... 7 Part 1 Opinion of the Independent Financial Advisor on the Waiver from Making a Tender Offer for All Securities of the Business by the Resolution of the Shareholders' Meeting (Whitewash) 1. General Characteristics

1.1 Transaction Background .............................................................................................................................. 9 1.2 The Applicant ............................................................................................................................................... 9 1.3 Relationship with the Company ................................................................................................................. 13 1.4 Offering price determination and appropriateness of the price of the Company’s newly issued and

offered shares in the Debt to Equity Conversion Scheme ......................................................................... 13 1.5 Market price determination for the price of the Company’s newly issued and offered shares in the Debt

to Equity Conversion Scheme .................................................................................................................... 13 1.6 Right of shareholders to refuse the new share offering at low price ........................................................ 14 1.7 Opinions of the Company’s Board of Directors according to the Capital Market Supervision Board No.

Tor Jor 73/2558 entitled Items in convening notification for a shareholders’ meeting of a listed company to approve security offering ....................................................................................................... 14

2. Opinion of the Independent Financial Advisor 2.1 Opinion of the Independent Financial Advisor on the policy and business management plan proposed

by ACO I ..................................................................................................................................................... 17 2.2 Voting right of the Applicant after the acquisition of the securities and future additional acquisition

without triggering a tender offer of all securities of the Company ........................................................... 23 2.3 Effects occurred to the shareholders, benefits, cons, and risk factors ..................................................... 24 2.4 Risk from rejection of the waiver from making a tender offer for all securities of the business by the

resolution of the shareholders' meeting (Whitewash) ............................................................................... 24 2.5 Completion of the list of the Applicant’s related persons under Section 258........................................... 25

3. Valuation .................................................................................................................................................................. 25 4. Summary of the Opinions of the Independent Financial Advisor .......................................................................... 26

4.1 The Independent Financial Advisor’s Opinion regarding the Appropriateness of the Price ........................ 26 4.2 The Independent Financial Advisor’s Opinion according to Benefits, Cons and Risk Factors of the

Company ........................................................................................................................................................... 26 4.3 Summary of the Independent Financial Advisor’s Overall Opinions ............................................................ 26


3

Abbreviations and Definitions

SEC, The Office of SEC Securities and Exchange Commission SET, The Stock Exchange Stock Exchange of Thailand The Company, GJS G J Steel Public Company Limited GSTEL G Steel Public Company Limited SSG CH SSG Capital Holdings Limited SSG III SSG Capital Partners III L.P. SSG GP SSG Capital Partner III GP, L.P. SSG GPGP SSG Capital Partner III GPGP, Ltd. KG Kendrick Global Limited ACO I Asia Credit Opportunities I (Mauritius) Limited Link Capital I Link Capital I (Mauritius) Limited SSG Group SSG CH, SSG III and KG which are ACO I and Link Capital I Independent Financial Advisor, JVS FA


Connected Transaction Allocation and Offering of the Newly Issued Ordinary Shares of the Company under the Debt to Equity Conversion Scheme

WHT With Holding Tax


4

No. Jor. 080/2017

August 8, 2017

Re Opinion of the Independent Financial Advisor on the Waiver from Making a Tender Offer for All Securities of the Business by the Resolution of the Shareholders' Meeting (Whitewash) for G J Steel Public Company Limited

To Audit Committee and Shareholders G J Steel Public Company Limited

Refer: 1) Resolutions of the G J Steel Public Company Limited Board of Directors’ meetings No. 2/2013 held on July 14, 2017

(and the amendment) 2) Information Memorandum concerning the Connected Transaction of G J Steel Public Company Limited dated July 14,

2017 (and the amendment) 3) Information Memorandum concerning the Offering of the Newly Issued Ordinary Shares of G J Steel Public Company

Limited to Specific Investors (Private Placement) dated July 14, 2017 (and the amendment) 4) Financial Statements of G J Steel Public Company Limited as of December 31, 2014, December 31, 2015, December

31, 2016, March 31, 2017 reviewed by A.M.T. & Associates. 5) Draft Summary of Key Agreements related to the Connected Transaction of G J Steel Public Company Limited 6) Appraisal Report of the G J Steel Public Company Limited’s Assets comprised of Land, Properties, and Machine

conducted by American Appraisal (Thailand) Company Limited dated June 14, 2017 7) Company Certificate, Memorandum of Association and other documents, including interviews with the management of

G J Steel Public Company Limited 8) Company Certificate, Memorandum of Association and other documents, including interviews with the management of

SSG Group 9) Draft Letter of the Request for Shareholders’ Meeting Resolution to Approve Acquisition of New Securities without

Requirement to Make a Tender Offer for All Securities of the Business ( Form 247- 7) prepared by Asia Credit Opportunities I (Mauritius) Limited

10) Report of the Opinion of the Independent Financial Advisor on Connected Transaction for G J Steel Public Company Limited dated August 8, 2017

Remark: The exchange rate used in this document is equal to approximately 34.51 Baht/USD, which is the average foreign

exchange rate quoted by commercial banks between May 2, 2017 to May 26, 2017 and announced by the Bank of Thailand. Please see further information from the website of the Bank of Thailand at (www.bot.or.th).


5

Disclaimers: 1) The study results and opinions, rendered by JVS Financial Advisory Company Limited (“Independent Financial

Advisor” or “JVS FA”) in this report, are based on information and assumptions obtained from the management of G J Steel Public Company Limited and publicly disclosed information available in websites of the Office of the Securities and Exchange Commission (www.sec.or.th) and of the Stock Exchange of Thailand (www.set.or.th).

2) The Independent Financial Advisor assumes no responsibility for profit or loss and any impact arising from the Transaction and/or future performance arising from the Transaction.

3) The Independent Financial Advisor's study was conducted by using knowledge, skills, and cautions, based on sound professional practices.

4) The Independent Financial Advisor determined and gave the opinions on the Transaction based on current situations and information available to our knowledge. Any material adverse change and effect of the situations and information may affect the opinions provided herein by the Independent Financial Advisor.

5) The opinion report of the Independent Financial Advisor proposed to the Board of Directors, the Audit Committee and the shareholders of G J Steel Public Company Limited is not relevant to completion or success of the Transaction or accomplishment of G J Steel Public Company Limited.

Scope of the Report The report of the Independent Financial Advisor on the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash) is conducted with the objective to provide appropriate information of the Transaction for the Company and/or the Company’s shareholders to consider the Transaction. The report and responsibility of the Independent Financial Advisor have scope and limitation as follow: 1) The Independent Financial Advisor has only a duty to prepare the report of the Independent Financial Advisor’s opinion

on the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash) under this report only. The Independent Financial Advisor is not the Company’s financial advisor for entering the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash).

2) The Independent Financial Advisor obtained information from the Company’s management, however, the Independent Financial Advisor does not guarantee correctness and completeness of all information. Thus, the report of the Independent Financial Advisor’s opinion on the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash) is based on the assumption that obtained information and documents are correct and complete.

3) The report of the Independent Financial Advisor’s opinion on the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash) has the objective to be an information for the Company’s shareholders’ consideration, nonetheless, the shareholders shall review the Company’s other information for their thorough consideration.

4) The report of the Independent Financial Advisor’s opinion on the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash) of G J Steel Public Company Limited does not intend to influence the share price of the Company or its subsidiaries.



6

Executive Summary

Transaction Background The report of the Independent Financial Advisor’s opinion on the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash) is a related transaction with the Connected Transaction of G J Steel Public Company Limited. Thus, the shareholders should consider the opinion provided in the report of the Independent Financial Advisor’s opinion on the Connected Transaction of the G J Steel Public Company Limited prepared by JVS Financial Advisory Company Limited on August 8, 2017 as a basis for making your decision regarding the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash).

Summary of the Independent Financial Advisor’s Opinion The Independent Financial Advisor’s Opinion regarding the Appropriateness of the Price

The Independent Financial Advisor has considered and opined that the Connected Transaction of the Company by allocating and offering of the Company’s newly issued ordinary shares to the SSG Group under the Debt to Equity Conversion Scheme has the fair value of approximately THB 0. 17 – 0. 35 per share, which makes the price for the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash) appropriate. The valuation can be summarized as follow:


(THB per share)


The Independent Financial Advisor has an opinion that since the Company expects to allocate and offer the Company’s newly issued ordinary shares to the SSG Group to repay the trade debts under the Debt to Equity Conversion Scheme, the share price of THB 0.3400 per share is deemed to be appropriate because the transaction price is within the range of the fair value evaluated by the Independent Financial Advisor.

The Independent Financial Advisor’s Opinion according to Benefits, Cons and Risk Factors of the Company can be summarized as follow:

Because the Connected Transaction and the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash) are a condition on each other, the Independent Financial Advisor considers benefits, cons and risk factors that may happen to the Company from both the Connected Transaction and the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash).

Please see details from the report of the Independent Financial Advisor’s opinion on the Connected Transaction dated August 8, 2017 Section 4. Summary of the Independent Financial Advisor’s Opinion.


7

Summary of the Independent Financial Advisor’s Overall Opinions From various considerations above, the Independent Financial Advisor has the opinion that the Company’s shareholders should approve the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash) because the conversion price under the Debt to Equity Conversion Scheme, approved by the Company’s Board of Directors on July 14, 2017, of THB 0.34 per share is in the fair value range evaluated by the Independent Financial Advisor of approximately THB 0.17 – 0.35 per share. Therefore, the Independent Financial Advisor deems that it is an appropriate price considering effects, pros, and cons incurred from the Connected Transaction and waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash).

Moreover, the Debt to Equity Conversion Scheme (Connected Transaction) and the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash) are a condition to each other. If the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash) is not approved by the shareholders’ meeting of the Company, the waiver requesting person (“Applicant”) will not intend to convert debt to equity and grant any financial assistance to the Company.

If the shareholders’ meeting of the Company approves the Debt to Equity Conversion Scheme (Connected Transaction) and the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash), the Company still has the risk of the change in the Company’s policy. Although, the Applicant intends to run the Company’s business as usual as stated in the Form 247 - 7, after the Debt to Equity Conversion Transaction and the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash), the Applicant will be a major shareholder of the Company and have a right to nominate directors in GJS more than half of the total seats. Thus, it might affect the Company’s policy in the future. Moreover, the Company and the Applicant might have interconnected transactions in the future, therefore, if there is an interconnected transaction, the Company should be aware on the operation, rationale, appropriateness of price, and fair conditions.

However, the Independent Financial Advisor believes that the Applicant can convey the Company’s operation to earn better long-term profit because the Applicant, which is the Company’s major shareholders, has experiences to solve the Company’s financial and high debt level problems and the Applicant has ability to give financial supports and business advices to the Company in the future. In conclusion, based on benefits, cons, risk factors, and other impacts with positive and negative influences, there is no crucial evidence to alter the Independent Financial Advisor’s opinion to other views from the price aspect.

Currently, the market price of GJS in the Stock Exchange of Thailand is greater the appropriate price evaluated by the Independent Financial Advisor. Hence, if the shareholders’ meeting of the Company approves the Debt to Equity Conversion Scheme (Connected Transaction) and the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash) and if the shareholders believe that the Debt to Equity Conversion Scheme has risks to the Company from changes or do not want to invest in the Company continuously, the shareholders can sell the Company’s share in the Stock Exchange of Thailand. Nonetheless, selling shares in the Stock Exchange may have the risk that they might not be able to sell shares with intended volume and price.

However, the final decision whether to approve the Transaction rests with the Company’s Board of Directors and shareholders. The Board of Directors and the shareholders can consider the opinion provided in the Independent Financial Advisor’s report as a basis for making your decision. Details of our study and opinion are as follows:


8

Part 1 Opinion of the Independent Financial Advisor

on the Waiver from Making a Tender Offer for All Securities of the Business

by the Resolution of the Shareholders' Meeting (Whitewash)


9

1. General Characteristics 1.1 Transaction Background

The report of the Independent Financial Advisor’s opinion on the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash) is a related transaction with the Connected Transaction of G J Steel Public Company Limited. Thus, the shareholders should consider the opinion provided in the report of the Independent Financial Advisor’s opinion on the Connected Transaction of the G J Steel Public Company Limited prepared by JVS Financial Advisory Company Limited on August 8, 2017.

1.2 The Applicant

Company Name Asia Credit Opportunities I (Mauritius) Limited Registered Office Globefin Management Services Ltd., 1st Floor Anglo-Mauritius House, Intendance

Street, Port Louis, Mauritius Incorporated under the Laws of

The Republic of Mauritius

Register Date April 22, 2016 Nature of Business Special Purpose Vehicle ( SPV) for investment of the SSG Group ( investment as

unsecured debtor) Registered Capital USD 3,527,969 Par Value USD 1 per share Shareholding Structure Kendrick Global Limited directly holds 100 percent1 Directors 1. Roshan Nathoo


Nature of Business The Applicant is a company limited established on April 22, 2016 with the objective to invest in the trade credit of the Company and GSTEL (after acquiring the securities in the Debt to Equity Conversion Scheme of the Company). The Applicant is a subsidiary whose shares are indirectly owned by the SSG Capital Holdings Limited (“SSG CH”) SSG Capital Partners III GPGP, Ltd. (“SSG GPGP”) SSG Capital Partner III GP, L.P. (“SSG GP”) SSG Capital Partners III, L.P. (“SSG III”) และ Kendrick Global Limited (“KG”) (collectively called “the SSG Group”)

The SSG Group is an alternative asset management firm which focuses on investing in the credit and special situations space. The SSG Group has expertise and focuses on investing in companies with financial problems and high debt liabilities ( Distressed Assets) because the management of the SSG Group has experiences and expertise in debt restructuring and business turnaround for more than 20 years.

1 Please see Shareholding Structure of the SSG Group


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The SSG Group’s core investment is in Asia Pacific region (including Thailand, Indonesia, India, China, Australia and other countries). Presently, the SSG Group has approximately USD 3.5 billion of assets under management with its offices and affiliates of the SSG Group located in Hong Kong, Singapore, Mumbai, Mauritius, Jakarta, Shanghai, New Delhi and Bangkok, and it has over 65 employees across Asia.

The Applicant is a subsidiary which is indirectly owned by SSG III, a fund established on November 19, 2014 under the registration of Cayman Islands. SSG III is the fund that raises money from outside investors and has a legal status of a limited partnership. At present, SSG III has investment and assets under its management of USD 800 million. During the earlier years, SSG III invested in many countries in Asia Pacific including Thailand.

Summary of the SSG III’s Operating Performance and Financial Position at the end of 2016

unit: USD million 2016

Total Assets 888.24 Total Liabilities 38.48 Shareholders’ Equity2 849.76

Total Revenues3 106.15 Total Expenses 26.53 Operating Profit 79.62

Furthermore, the SSG Group’s achievements have been recognized through several industry awards over the past years, including awards from Private Equity International for “Distressed/Special Situations Firm of the Year in Asia” in 2016, 2015 and 2014, from Private Debt Investor for “Distressed Debt Investor of the Year, Asia Pacific” and “Fundraising of the Year, Asia Pacific” in 2016, 2015 and 2014, “Lender of the Year, Asia Pacific” in 2016 and 2 0 1 5 , and “Real Estate Debt Fund Manager, Asia Pacific” in 2 0 1 5 . It has previously won the Investment Performance Awards from Asian Investor in 2013, 2012 and 2011.

After the SSG Group invests in the Company, the SSG Group has no intention to sell or transfer the Company’s ordinary shares to other parties outside the SSG Group during the first 12 months after the date received the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash). After the 12 months, the Applicant might consider to change its shareholding portion in the Company because the Applicant, generally, has investment period of 5 – 7 years on average. The change of the shareholding portion depends on various factors such as the Company’s operation performance, financial position, and investment decision of the investment committee.

2 Net assets attributable to the partners = Total Assets – Total Liabilities 3 Revenues of SSG III include net profit (loss) from the change in the fair value of assets and financial liabilities, interest income, and other incomes.


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Registered paid-up capital. On June 30, 2017, Asia Credit Opportunities I ( Mauritius) Limited has the issued and paid-up capital of THB 3,527,969.

List of the first top 10 shareholders4 and 5 of the Applicant on June 30, 2017 Name Number of

shares % of the total issued shares of the

Applicant6 % of the total voting right of

the Applicant 7 Kendrick Global Limited 3,527,969 100% 100%

List of the first top 10 shareholders of Kendrick Global Limited on June 30, 2017 Name Number of

shares % of the total issued shares of

KG % of the total voting right

of KG SSG Capital Partners III, L.P. 100 100% 100%

4 Count only the shareholders under the Section 258 of the Securities and Exchange Act B.E. 2535 (as amended) and the shareholders is under the same controlling

group. 5 In the case that a shareholder in the top 10 list of the shareholders has behavior to influence on policy setting, managing, or operation of the Applicant

such as sending a person to be an authorized director of the Applicant and has an ultimate shareholder such as its shareholder being a holding company or nominee account, it should show the name and nature of business of the ultimate shareholder.

6 Total issued shares of the Applicant = Number of ordinary shares + preferred shares – treasury shares at the end of the month before the month of the application submission to the Office of SEC.

7 Total voting right of the Applicant = Right to vote of the total issued shares of the Applicant


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2. SSG III is a Cayman Limited Partnership and is a collective Investment Fund which has capital commitments from the external investors who are limited partners (98.36 percent) and SSG GP (1.64 percent). SSG GP is the general partner who has operational control over SSG III whereas the limited partners are essentially financial investors in SSG III who have no involvement with the operations of SSG III and do not have any relationship with the Company which would led to them being considered as connected persons of the Company. As of the date of this information memorandum, limited partners mainly comprise investors who are pension funds, sovereign wealth funds, family offices, insurance companies, endowment funds, and fund of funds. Specific details of the limited partners cannot be disclosed to public as they are prohibited under confidentiality agreements.

3. Link Capital I and ACO I are private limited companies set up as special purpose vehicles for investments by SSG III. The SSG Group has decided to have Link Capital I make investments as a secured creditor and have ACO I make investments as an unsecured creditor for ease of management and investment segregation. Moreover, the SSG Group’s investments do not have any conflict of interest with the Company and GSTEL.


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1.3 Relationship with the Company Currently, the Applicant does not own any share of the Company but the Applicant is expected to acquire a significant portion of shares in G Steel Public Company Limited (GSTEL) from the Debt to Equity Conversion Scheme on the same day (or in the same time period) that the Applicant will receive the new shares of the Company. As the result, the Applicant has an obligation to do a tender offer for all securities of GSTEL as well. The GSTEL share acquisition of the Applicant will make GSTEL and G S Security Holding Company Limited (the GSTEL’s subsidiary) to be a related person with the Applicant according to the Section 258 of the Securities and Exchange Act B.E. 2535 (as amended).

Since the transaction is connected to the debt restructuring transaction of GSTEL, GSTEL, owned by the Company of 2,122,427,209 shares or equivalent to 20.05% of the Company’s total issued and paid-up shares, and G S Security Holding Company Limited, the subsidiary of GSTEL and owning the Company’s shares of 520,000,000 shares or equivalent to 4.91% of the Company’s total issued and paid-up shares, are the shareholders with conflict of interest and have no voting right in the Company’s shareholders’ meeting8.

1.4 Offering price determination and appropriateness of the price of the Company’s newly issued and offered shares in the Debt to Equity Conversion Scheme

The Company sets the price of the Company’s newly issued ordinary shares at THB 0.3400 per share for the newly issued ordinary shares of not more than 3,343,000,000 shares, total value of not greater than THB 1,136,620,000.00 in order to repay the net trade debt of USD 32,934,250.00 or equivalent to THB 1,136,535,345.40 under the Debt to Equity Conversion Scheme. In this regard, the Company’s criteria for determining the offering price are based on the negotiation and agreement between the 2 parties and the price based on the average closing price of the Company’s shares traded on the SET from May 2 to May 26, 2017 (equivalent to THB 0.3267 per share), which is the period that the Company and the SSG Group negotiated on the condition under the MOU on May 26, 2017. The said price was determined from the benefits that the Company will receive from the partial trade debt reduction (Haircut) by waiving of unpaid interest portion of USD 2,995,462, or equivalent to THB 103,371,065.81.

In the case that the conversion price is lower than 90 percent of the market price during the period of 7-15 business days prior to the date of the debt to equity conversion, ACO I will not sell the newly issued ordinary shares within 1 year from the date on which the newly issued ordinary shares of the Company are first traded on the SET (Silent Period). Nonetheless, ACO I may sell not more than 25 percent of the lock-up said newly issued ordinary shares after the newly issued ordinary shares of the Company have been traded on the SET for 6 months.

1.5 Market price determination for the price of the Company’s newly issued and offered shares in the Debt to Equity Conversion Scheme

Market Price is referred from the weighted average of the Company’s shares in the Stock Exchange 7 business days retrospectively before the Board of Directors of the Company approved to propose the agenda to the Extraordinary General Meeting of the Company’s Shareholders No. 1/2017 to approve the Company to issue and offer newly issued ordinary shares under the Debt to Equity Conversion Scheme. The period is between July 4 , 2017 to July 13, 2017 and the price is THB 0.5272 per share (Information from www.setsmart.com of the SET).

8 Information from the Share Register of the Company as at the Book Closing Date on July 11, 2017


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1.6 Right of shareholders to refuse the new share offering at low price The allocation and offering the Company’s newly ordinary shares under the Debt to Equity Conversion Scheme is the offering by setting the ordinary share price 35.50% discounted from the market price on the meeting date of the Company’s board of directors ( Please see details of the market price in the Section 1.5). The offering of the newly issued ordinary shares of the Company to specific investors (Private Placement) with a discount of more than 10 percent of the market price pursuant to the Tor Chor. 72/2558 Notification is required a three-fourths (or 75 percent) vote of the shareholders attending the meeting and having the right to vote and without any objection on the proposed offering price by the shareholders with an aggregate shareholding of 10 percent of the total votes of the shareholders attending such meeting and having the right to vote..

1.7 Opinions of the Company’s Board of Directors according to the Capital Market Supervision Board No. Tor Jor 73/2558 entitled Items in convening notification for a shareholders’ meeting of a listed company to approve security offering.

1) Background on the Determination of the Offering Price and Reasonableness of the Offering Price of the Newly Issued Ordinary Shares to be Offered to the Subscriber The price of the allocation and offering the Company newly issued shares under the Debt to Equity Conversion Scheme at THB 0.3400 per share is the negotiated price between the Company and ACO I in the Section 1.4. The Company’s board of directors has the opinion that the offering price of the Company’s newly issued ordinary shares with the discount is appropriate and benefits the Company and the shareholders even though the allocation and offering of the newly issued ordinary shares of the Company under the Debt to Equity Conversion Scheme will result in an accounting loss from the recognition of the difference between the fair value and the offering price of the newly issued ordinary shares as an expense from the debt restructuring in accordance with the Thai Accounting Standard No. 104 Re: Accounting for Troubled Debt Restructurings, which may further result in a higher net loss in the comprehensive income statement.

In the allocation and offering of the newly issued ordinary shares of the Company under the Debt to Equity Conversion Scheme, the Company will be able to reduce the debt of USD 37,358,546 or equivalent to THB 1,289,214,378 and will receive the financial assistance from Link Capital I. As the result, it will enable the Company to have adequate funding for its business operation and be able to resume its normal business operation and it is expected that the foregoing will enable the Company to generate revenues and profits in the future, as well as creating more opportunities for the Company to secure additional financing from financial institutions in the future.

Moreover, the SSG Group, which will become a major shareholder of the Company, consists of investment funds and has an expertise in managing and solving corporate financial crises in the past. Additionally, once the SSG Group becomes a major shareholder of the Company, the SSG Group has a clear problem-solving guideline, which will help ameliorate the financial status of the Company. Nevertheless, in order to minimize the risk regarding the Company’s management and to reinforce the confidence that the management is carried out by professionals in order to achieve its goals, the Company must hire Synergy as its business and management advisor.

The determination of the offering price for the allocation and offering of the newly issued ordinary shares of the Company to the subscriber at THB 0.3400 per share is an offering of the newly issued ordinary shares of the Company to a specific investor (Private Placement) at an offering price with a discount of more than 10 percent of the market price, or equivalent to 35.50 percent discount of the market price. Please see details of the market price in Section 1.5.


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2) Rationale and Necessity of the Offering to the Subscriber

The allocation and offering of the newly issued ordinary shares of the Company under the Debt to Equity Conversion Scheme will enable the Company to:

• clear a total debt of USD 37,358,546, or equivalent to THB 1,289,214,378

• have ACO I, a company in the SSG Group, who is a capable investor having readily available funds as well as expertise in various industries and is adept at solving financial problems, as a major shareholder

• have Synergy, a company having a team of experts with experience and reputation in managing companies in the steel industry as its business and management advisor

• receive the financial assistance from Link Capital I under the Credit Agreement, with the loan amount of USD 71,000,000, or equivalent to THB 2,450,154,777.78

3) Feasibility of the Offering Proceeds Utilization Plan

The allocation and offering of the newly issued ordinary shares of the Company under the Debt to Equity Conversion Scheme will enable the Company to clear a total debt of USD 3 7 , 3 5 8 , 5 4 6 , or equivalent to THB 1,289,214,378 , as detailed in 2.2 (Please see the details in the Debt to Equity Conversion Scheme of G J Steel Public Company Limited in Enclosure 1).

4) Reasonableness of the capital increase and sufficiency of funding in case the offering proceeds is insufficient for the required project budget

After the Company has considered the guidelines and the reasonableness of the allocation and offering of the newly issued ordinary shares of the Company under the Debt to Equity Conversion Scheme at the offering price of THB 0.3400, the Company is required to proceed accordingly as the Company wishes to repay the existing trade debt which is in an exceptionally large amount, including other debts arising from the current business operation in order to help the Company to be able to resume its normal business operation and have adequate funding for its undertakings. Not only will the Debt to Equity Conversion clear the large amount of Trade Debt, including other debts arising from the current business operation, but having a source of fund from the loan with the SSG Group will help strengthen the Company’s business operation capacity and it is expected that the foregoing will enable the Company to generate revenues and profits in the future. Moreover, the Company is confident in the professionalism of the SSG Group, which consists of investment funds and has an expertise in managing and solving corporate financial crises. Additionally, the SSG Group has a clear problem-solving guideline, which will help ameliorate the financial status of the Company, and if the SSG Group becomes a major shareholder of the Company, the Company must hire Synergy, a company having a team of experts with experience and reputation in managing the world’s leading companies in the steel industry, as part of the debt restructuring plan of the Company and the conditions of the Credit Agreement. Moreover, one of the Synergy team members has successfully revived the financial status of several companies with a similar business to the Company in various countries.


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5) Expected effects on the Company’s business operation, financial position, and operating results as a result of the capital increase and implementation of the proceeds utilization plan Since the allocation and offering of the newly issued ordinary shares of the Company under the Debt to Equity Conversion Scheme is an offering of shares with a discount of more than 10 percent of the market price pursuant to the Tor Chor. 7 2 / 2 5 5 8 Notification, the Company, therefore, is required to recognize the accounting loss by recording the difference between the offering price and the fair value multiplied with the number of the issued and offered shares as an expense from the debt restructuring in the comprehensive income statement.

However, such allocation and offering of the newly issued ordinary shares will result in a better equity structure of the Company. The debt to equity ratio as calculated based on the separate financial statements of the Company as of March 31, 2017, will be reduced from 0.39 to 0.26 times.

Apart from the effects that may occur to the financial position and the operating results of the Company as stated above, the Company will incur debts from the loan and interest arising from the loan provided by Link Capital I, with the loan amount of USD 71,000,000, or equivalent to THB 2,450,154,777.78, with a loan period of 5 years9. Nevertheless, the Company believes that by clearing the debt of USD 3 7 , 3 5 8 , 5 4 6 , or equivalent to THB 1,289,214,378, receiving the Financial Assistance from Link Capital I under the Credit Agreement, and having professionals, i.e. Synergy, in charge of its management, will enable the Company to have adequate funding for its business operation and be able to resume its normal business operation, which is expected to result in the Company being able to generate adequate funds to repay ACO I and improve its revenue and profits in the future.

9 Please see footnote 11


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2. Opinion of the Independent Financial Advisor 2.1 Opinion of the Independent Financial Advisor on the policy and business management plan proposed by

ACO I ACO I is a company established under the special objective in the control of the SSG Group. According to the policy and business management plan within 12 months after the GJS share acquisition from the debt to equity conversion proposed by ACO I, the Independent Financial Advisor has opinion as below:

Policy and Business Operation Plan From the 247 – 7 Form and the interview with the SSG Group management, the Applicant has no plan or policy to change the business operation objective of the Company and its subsidiaries significantly during the 12 months from receiving the waiver and still keeps the business direction in the products of various grades of hot roll coiled.

However, the Company’s board of directors may consider to change or modify the business policy, organization structure, personnel, marketing plan, dividend policy, and financial structure if it is necessary and appropriate regarding industry and the Company’s business condition at a certain time. The changes have an objective to enhance its operating efficiency and business growth which will benefit the Company and its shareholders.

The Independent Financial Advisor believes it is appropriate and possible that the SSG Group may not change the GJS’s business operating objective significantly because the SSG Group has the business focusing on an alternative asset management which emphases on investing in the credit and special situations. The SSG Group hires Synergy Strategic Solutions Management DMCC (“Synergy”), a business and management advisory service provider whose clients include international steel manufacturers, having a team of experts with experience in the steel industry at the international level to help the Company. Moreover, the SSG Group intends to assist the Company is other aspects such as granting fund for capital expenditure and working capital, helping to negotiate for financial agreements with financial institution, and setting trade policy and conditions. (Please see additional details in the report of the Independent Financial Advisor’s opinion on the Connected Transaction of the G J Steel Public Company Limited prepared by JVS Financial Advisory Company Limited on August 8, 2017 under the Section 2.1.6 Other Related Information may affect Shareholders in the Subsection J. Information of Synergy Strategic Solutions Management DMCC)

Nonetheless, after the Debt to Equity Conversion Transaction (the Connected Transaction) and the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash), the SSG Group will be a major shareholder of the Company and have a right to nominate directors in GJS more than half of the total seats. Thus, it might affect the Company’s policy in the future.


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Financial Assistance to enhance productivity and operating activity of the Company

From the 247 – 7 Form and the interview with the SSG Group management, the SSG Group has plan to improve and maintain the Company’s key machine, tools, and equipment, as the result, the Company can increase its production by being able to produce during the low electricity usage (Off Peak) period and high electricity usage ( Peak) period. The Applicant believes that the operating plan is necessary for the increase of plant production utilization, which currently can produce in low electricity usage ( Off Peak) period only in order to reduce its production cost. The production enhancement plan will reduce the fixed cost of the plant and will provide the Company more competitiveness. Thus, the Company can earn high profit.

In addition, the Applicant will improve the raw material procurement approach to be more efficient by searching for higher raw material quality and will improve the marketing policy to be more efficient to support the Company’s hot roll coiled distribution. The improvement can reduce the Company’s variable costs which presently is higher than its competitors. In the meantime, the Applicant intends to increase quality of the Company’s hot roll coiled to have more selections by separating quality grades in order to give more choices for its export and customers.

The SSG Group also supports the Company to hire Synergy Strategic Solutions Management DMCC (“Synergy”), a business and management advisory service which has an experience and reputation in managing and the world’s leading companies in the steel industry and business turnaround. Moreover, the Synergy team will help to increase the Company’s production and internal management efficiency resulting that the Company can decrease its production cost per unit and manage its inventory more efficient including trade agreement negotiation, which will enhance its product competitiveness. In addition, the Synergy team will give advice to the Company’s management and may be appointed in an important position of the Company.

Furthermore, the SSG Group intends to assist the Company is other aspects such as granting fund for capital expenditure and working capital, helping to negotiate for financial agreements with financial institution, and setting trade policy and conditions, which will result to the maximum benefit to the Company’s shareholders, trade counterparties, employees, and other stakeholders.

The Independent Financial Advisor believes that it is appropriate because the SSG Group’s financial assistance in order to increase the production rate and operation efficiency, to support funds for the Company’s future investment and working capital, and to enhance the Company’s product quality to be more variety, including appoint a working team with experts to give advice to the Company’s existing management can help solving the GJS’s problem. Based on the interview with the GJS’s management and related employees, currently, GJS has problems with its lack of working capital and capital expenditure to improve and enhance its operation efficiency. Consequently, the Company experiences its operating loss from its business operation and has low level of cash flow from operating activities compared to the total liabilities according to the summary of Company’s financial statements, with the situation, the Company’s ability to find sources of funds from financial institutions is limited.


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Organization Structure

From the 247 – 7 Form and the interview with the SSG Group management, the SSG Group has no plan to change any structure of the Company’s committees from present which are such as the Company’s board of directors, audit committee, and management board. Conversely, as the largest shareholders, the Applicant may nominate a person to be in the Company’s board of directors or management team as appropriate in order to support the Company’s operation. The key changes are as follows:

Board of Directors The SSG Group intends to increase the number of directors for 2 seats from 9 directors to 11 directors. Since the Company is still a public company limited, thus, any change in the structure of the board of directors is still required to perform under terms in Public Company Limited Act B.E. 2535 and other related regulations.

Structure and List of the Boards of Directors before and after the waiver Before request for the waiver After security acquisition in the Section 110

Name Position Name Position Mr. Yanyong Kurovat Chairman Mr. Yanyong Kurovat Chairman Mr. Ryuzo Ogino Director/CEO Mr. Sudhir Maheshwari11 Director Ms. Soontareeya Wongsirikul

Director Mr. Andreas Rizal Vourloumis12 Director

Mr. Somchai Leeswadtrakul Director Mr. Richard Yee13 Director Mr. Komol Wong-Apai Director Mr. Tobias Damek14 Director Mrs. Churairat Panyarachun Director Ms. Methikan Chutipongsiri Director Assoc. Prof. Niputh Jitprasonk

Independent Director/ Chairman of Audit Committee

Mr. Somchai Leeswadtrakul Director

Assoc. Prof. Sukanya Tantanawat

Independent Director/Audit Committee

Assoc. Prof. Niputh Jitprasonk Independent Director/ Chairman of Audit Committee

Mr. Michael Wyer Independent Director/Audit

Committee Dr.Narumon Saardchom 15 Independent Director/Audit

Committee Assoc. Prof. Sukanya Tantanawat Independent Director Mr. Steve Stewart16 Independent Director/Audit

Committee

10 Number of directors will increase for 2 seats from 9 directors to 11 directors. 11 Newly appoint director 12 Newly appoint director 13 Director replacing the resigning directors 14 Director replacing the resigning directors 15 Director replacing the resigning directors 16 Director replacing the resigning directors


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Organization Structure The Applicant intends to appoint reputed professionals from the steel industry in important divisions of the Business viz. sales and marketing, finance & accounting, operations, raw material procurement within a period of 12 months from the shareholder approval for the proposed restructuring, including appointing the person from the Synergy to hold a position of the Chief Executive Officer (CEO) of the Company. Such professionals shall continue to assist the existing management towards the improvement of the business’s operational and financial performance. Moreover, the Applicant has no intention to reduce number of employees.

Organization Structure proposed by the Applicant

The Independent Financial Advisor believes that the change will be appropriate if the change of the board of directors and the organization structure of GJS are the change with working characteristic and framework which should benefit to the Company’s operation and complying with terms in Public Company Limited Act B.E. 2535 and other related regulations. Moreover, Mr. Sudhir Maheshwari has successfully revived the financial status of several companies with a similar business to the Company in various countries and has work experience with ArcelorMittal engaging in the steel industry at the international level. (Please see additional details in the report of the Independent Financial Advisor’s opinion on the Connected Transaction of the G J Steel Public Company Limited prepared by JVS Financial Advisory Company Limited on August 8, 2017 under the Section 2.1.6 Other Related Information may affect Shareholders in the Subsection J. Information of Synergy Strategic Solutions Management DMCC)

Nonetheless, after the Debt to Equity Conversion Transaction (the Connected Transaction) and the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash), the SSG Group will be a major shareholder of the Company and have a right to nominate directors in GJS more than half of the total seats. Thus, it might affect the Company’s policy in the future.


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Key Asset Disposition Plan of the Company From the 247 – 7 Form and the interview with the SSG Group management, the Applicant has no intention to sell key assets of the Company during the next 12 months.

The Independent Financial Advisor believes it is appropriate and possible that the SSG Group may not sell key assets of the Company within the next 12 months since the SSG Group is granting fund for increasing production rate and efficiency of its operation and appointing experts to advise the Company’s existing management team. The SSG Group’s intention shows its willingness to solve the GJS’s problems and the repayment condition of the debt from the SSG Group is that the Company has a repayment period of 5 years. (Please see additional details in the report of the Independent Financial Advisor’s opinion on the Connected Transaction of the G J Steel Public Company Limited prepared by JVS Financial Advisory Company Limited on August 8, 2017 under the Section 2.1.6 Other Related Information may affect Shareholders in the Subsection I. Documents related to the Transaction)

Status of the Listed Company From the 247 – 7 Form and the interview with the SSG Group management, the Applicant has no intention to delist the Company’s securities from being listed securities in the Stock Exchange of Thailand (“Stock Exchange”) during the 12 months after obtaining the waiver excepted the Applicant has an obligation to comply with related regulations.

The Independent Financial Advisor believes it is appropriate and possible that the SSG Group has no intention to delist the Company’s securities from being listed securities in the Stock Exchange since the SSG Group is granting fund for increasing production rate and efficiency of its operation and appointing experts to advise the Company’s existing management team. It shows its willingness to solve the GJS’s problems.

Dividend Policy From the 247 – 7 Form and the interview with the SSG Group management, the Applicant has no intention to change the Company’s dividend policy which previously is set at the rate of 50% of the net income (after tax deduction) according to the Company’s financial statements. However, the Applicant may consider certain developments to the Business’s dividend policy in the case that there are any significant changes to the business, or any other business opportunity resulting in needs of investment for the purpose of competitive advantage and enhance efficiency and competitiveness for the Business in the future. In the case that the Business has excess liquidity and no required investment, the Applicant may consider propose the dividend payment or interim dividend payment from retained earnings to the board of directors and/ or shareholder meeting (depending on circumstances).

However, the Company’s dividend payment is subject to the condition in the Credit Agreement with Link Capital I that the Company must receive a letter of consent from Link Capital I before any dividend payment.


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The Independent Financial Advisor deemed appropriate but because the SSG Group stated in the 247 – 7 Form that the SSG Group may consider to change the Company’s dividend policy if there is a major change of the Company’s business and the Company’s dividend payment is subject to the condition in the Credit Agreement with Link Capital I that the Company must receive a letter of consent from Link Capital I before any dividend payment. That may affect the shareholders that may receive less return on investment or conflict with investment of policy of each shareholder.

Policy related to connected transaction Currently, the Company has specified policies and procedures regarding related party transactions to comply with the rules and regulations of the Stock Exchange and the office of Securities and Exchange Commission (SEC) to prevent any conflict of interests between the Business, its subsidiaries, associate companies and/or any potential conflict persons.

AT the moment, the Applicant and its related persons according to the Section 258 of the Securities and Exchange Act B.E. 2535 (as amended) have no interconnected transactions with the Company. However, connected transactions between the Applicant and the Company in the future shall be complied with the rules and regulations of the SET and the SEC, Articles of Association, Capital Market Supervisory Board’s regulations, and other applicable rules regarding connected transaction.

From the 247 – 7 Form and the interview with the SSG Group management, within 12 months of the end of proposed restructuring, the Applicant or any person in connection with the Applicant pursuant to Section 258 of the Securities and Exchange Act B.E. 2535 (as amended) has no plan to materially change on type and size of the existing related party transactions under current policy on the related party transaction of the Company.

However, the Applicant shall carefully consider and ensure that the related party transactions, existing transactions and future transactions, will be transactions on the arm’s length basis. Any current and future related party transactions will be carefully considered and ensured so that terms and conditions of such transactions are similar to those of normal business transactions at an arm’s length basis. There would not be any special terms or preference among the Company, its related companies, associate companies and shareholders. These procedures are consistent with rules and regulations of the SET and seek to ensure that all related party transactions are conducted at arm’s length basis.

The Independent Financial Advisor has an opinion that the policy of related party transactions is appropriate because it has conditions ruling at the same basis of entering a transaction with other persons and has the procedure regulated by related agencies. Thus, if there is a connected transaction, the Company must be careful with its reasonability of price and fair condition.


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2.2 Voting right of the Applicant after the acquisition of the securities and future additional acquisition without triggering a tender offer of all securities of the Company In case that the Company’s Extraordinary General Meeting of the Shareholders No. 1/2017 held on August 30, 2017 resolved to approve the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash) and other agendas, ACO I will become a majority shareholder of the Company with a direct shareholding of 2 4 percent of the total issued shares of the Company and indirect shareholding of 18.97 percent of the total issued shares of the Company through GSTEL (after registration of the Company’s paid-up capital)17 or equivalent to 42. 97% of the total voting right of the Company. Details are as follows.

Name of person/

juristic person

Class of

securities

Number of

shares/

underlying shares

held prior to

request for the

resolution18

Number of

shares/

underlying

shares for

which the

resolution is

requested19

Securities to be held after the acquisition of

securities under 1. Number of

shares/

underlying

shares 20

Percentage of

shares/underlying shares

in comparison with the

total voting rights of the

Company 21

I. The Applicant Ordinary shares - 3,342,751,016 3,342,751,016 24.00 Preferred shares - - - - Warrants - - - -

Convertible

debentures - - - -

Other securities

(if any) - - - -

II. Persons in the same

group of the Applicant

1. - - - - 2. - - - - III. Related persons under

Section 258 of the

Persons under I and II

1. GSteel Ordinary shares 2,122,427,209 - 2,122,427,209 15.24 2. GS Securities Holding

Company Limited Ordinary shares 520,000,000 - 520,000,000 3.73

Total 5,985,178,225 42.97

17 If combining the Company’s capital increase due to the share allocation of the newly issued ordinary shares to accommodate th e adjustment

of rights for the warrants of the Company based on the assumption that the warrants are exercised in full, ACO I will become a majority shareholder of the Company with a direct shareholding of 17.84 percent and an indirect shareholding of 22.48 of the total iss ued shares of the Company.

18 As for the number of underlying shares for convertible securities held prior to the request for the resolution, specify only the number of shares to be acquired from exercise of purchase or conversion right under convertible securities acquired from the previous g rant of waiver from the requirement to make a tender offer for all securities of the Business prior to the request for the resolution at this time (if any).

19 See Footnote 1. 20 Number of shares = units multiplied by the number of shares acquired from exercising the right offering or the conversion per share 21 The total voting rights of the Company = the total voting rights of the Business after the issuance of shares for capital increase at this time

+ the total voting rights of the underlying shares for convertible securities held after the acquisition as specified in I to III


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Since the shareholding portion in the Company by the Applicant will reach above 25 percent of the total vote of the Company, if in the future the Applicant increases its shareholding portion (excluded from the existing voting right such as by using the right from warrants or right offering) of more than or equal to 7.03%, the Applicant will hold total stake in the Company equal or more than 50% of the total vote of the Company. As the result, the Applicant has an obligation to do a tender offer for all securities of the Company.

Nonetheless, the regulation of the Stock Exchange of Thailand entitled Listing of Ordinary Shares or Preferred Shares as Listed Securities B.E. 2558 date May 11, 2015 (as amended) regarding maintaining listed company status states that a listed company must maintain properties on the share distribution by having shareholders not less than 150 persons and those shareholders shall hold the company’s shares collectively not less than 15% of the issued and paid up capital of the listed company. Therefore, if the Applicant holds the Company’s share more than 85% of the issued and paid up capital, the share distribution of the retails investors will be reduced to less than the regulation and the Company must correct the circumstance by having the share distribution to retail investors complied with the regulation and reducing the shareholding portion of the Applicant.

2.3 Effects occurred to the shareholders, benefits, cons, and risk factors Please see details in the report of the Independent Financial Advisor’s opinion on the Connected Transaction of the G J Steel Public Company Limited prepared by JVS Financial Advisory Company Limited on August 8, 2017 under the following sections: • 2.2 Effects may occur to Shareholders • 2.3 Benefits or pros of the Transaction • 2.4 Cons of the Transactions • 2.5 Risk Factors

2.4 Risk from rejection of the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash) Because the approval of the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash) is an important condition of the allocation and offering the Company’s newly ordinary shares under the Debt to Equity Conversion Scheme to ACO I in order to repay the net trade debt of the Debt to Equity Conversion Scheme (Connected Transaction), if the shareholders’ meeting does not approve the waiver, ACO I will not continue the Debt to Equity Conversion Scheme and it may result to a failure of the conditions of the additional financial assistance. Please see details in the report of the Independent Financial Advisor’s opinion on the Connected Transaction of the G J Steel Public Company Limited prepared by JVS Financial Advisory Company Limited on August 8, 2017 under the following section: • 2.1.6 Other Related Information may affect Shareholders in the Subsection B. Impacts to the Statement of

Financial Position from the Transaction • 2.1.6 Other Related Information may affect Shareholders in the Subsection I. Documents related to the

Transaction • 2.7 Comparison of Benefits and Effects if do not enter the Transaction


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2.5 Completion of the list of the Applicant’s related persons under Section 258 According to the disclosure in the 247-7 Form, currently, the Applicant does not own any share of the Company but the Applicant is expected to acquire a significant portion of shares in G Steel Public Company Limited (GSTEL) from the Debt to Equity Conversion Scheme on the same day (or in the same time period) that the Applicant will receive the new shares of the Company. As the result, the Applicant has an obligation to do a tender offer for all securities of GSTEL as well. The GSTEL share acquisition of the Applicant will make GSTEL and G S Security Holding Company Limited (the GSTEL’s subsidiary) to be a related person with the Applicant according to the Section 258 of the Securities and Exchange Act B.E. 2535 (as amended). Shareholding portion in the Company of GSTEL and G S Security Holding Company Limited as of July 11, 2017 is as follows.

Company Name Type of

Securities Number of shares held

% of the Company’s issued and paid-up

capital

% of the Company’s voting right

GSTEL Ordinary 2,122,427,209(1) 20.05 20.05 G S Security Holding Company Limited Ordinary 520,000,000 4.91 4.91 Total 2,642,427,209 24.96 24.96

Remark (1) GSTEL already sold 22,000,000 shares with an option to repurchase such shares to a third-party where the ownership over

such shares was already transferred to the purchaser. However, the purchaser has not changed the shareholder name with the registrar of the Company, thus, GSTEL holds the Company’s shares of 2,100,427,209 shares.

3. Valuation

Please see additional details in the report of the Independent Financial Advisor’s opinion on the Connected

Transaction of the G J Steel Public Company Limited prepared by JVS Financial Advisory Company Limited on

August 8, 2017 under the Section 3 Valuation

Summary of Appropriate Fair Price of GJS


(THB per share)


The Independent Financial Advisor has opinion that the appropriate valuation approaches for the GJS’s shares are the Historical Market Price and the Discounted Cash Flow Approach (DCF) which derive the price of between THB 0. 17 – 0.35 per share.


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4. Summary of the Opinions of the Independent Financial Advisor 4.1 The Independent Financial Advisor’s Opinion regarding the Appropriateness of the Price

The Independent Financial Advisor has considered and opined that the Connected Transaction of the Company by allocating and offering of the Company’s newly issued ordinary shares to the SSG Group under the Debt to Equity Conversion Scheme has the fair value of approximately THB 0.17 – 0.35 per share, which makes the price for the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash) appropriate. The valuation can be summarized as follow:


(THB per share)


The Independent Financial Advisor has an opinion that since the Company expects to allocate and offer the Company’s newly issued ordinary shares to the SSG Group to repay the trade debts under the Debt to Equity Conversion Scheme, the share price of THB 0.3400 per share is deemed to be appropriate because the transaction price is in the range of the fair value evaluated by the Independent Financial Advisor.

4.2 The Independent Financial Advisor’s Opinion according to Benefits, Cons and Risk Factors of the Company can be summarized as follow: Because the Connected Transaction and the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash) are a condition on each other, the Independent Financial Advisor considers benefits, cons and risk factors that may happen to the Company from the Connected Transaction and the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash).

Please see details from the report of the Independent Financial Advisor’s opinion on the Connected Transaction dated August 8, 2017 Section 4. Summary of the Independent Financial Advisor’s Opinion.

4.3 Summary of the Independent Financial Advisor’s Overall Opinions

From various considerations above, the Independent Financial Advisor has the opinion that the Company’s shareholders should approve the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash) because the conversion price under the Debt to Equity Conversion Scheme, approved by the Company’s Board of Directors on July 14, 2017, of THB 0.34 per share is in the fair value range evaluated by the Independent Financial Advisor of approximately THB 0.17 – 0.35 per share. Therefore, the Independent Financial Advisor deems that it is an appropriate price considering effects, pros, and cons incurred from the Connected Transaction and waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash).


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Moreover, the Debt to Equity Conversion Scheme (Connected Transaction) and the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash) are a condition to each other. If the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash) is not approved by the shareholders’ meeting of the Company, the waiver requesting person (“Applicant”) will not intend to convert debt to equity and grant any financial assistance to the Company.

If the shareholders’ meeting of the Company approves the Debt to Equity Conversion Scheme (Connected Transaction) and the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash), the Company still has the risk of the change in the Company’s policy. Although, the Applicant intends to run the Company’s business as usual as stated in the Form 247 - 7, after the Debt to Equity Conversion Transaction and the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash), the Applicant will be a major shareholder of the Company and have a right to nominate directors in GJS more than half of the total seats. Thus, it might affect the Company’s policy in the future. Moreover, the Company and the Applicant might have interconnected transactions in the future, therefore, if there is an interconnected transaction, the Company should be aware on the operation, rationale, appropriateness of price, and fair conditions.

However, the Independent Financial Advisor believes that the Applicant can convey the Company’s operation to earn better long-term profit because the Applicant, which is the Company’s major shareholders, has experiences to solve the Company’s financial and high debt level problems and the Applicant has ability to give financial supports and business advices to the Company in the future. In conclusion, based on benefits, cons, risk factors, and other impacts with positive and negative influences, there is no crucial evidence to alter the Independent Financial Advisor’s opinion to other views from the price aspect.

Currently, the market price of GJS in the Stock Exchange of Thailand is greater the appropriate price evaluated by the Independent Financial Advisor. Hence, if the shareholders’ meeting of the Company approves the Debt to Equity Conversion Scheme (Connected Transaction) and the waiver from making a tender offer for all securities of the business by the resolution of the shareholders' meeting (Whitewash) and if the shareholders believe that the Debt to Equity Conversion Scheme has risks to the Company from changes or do not want to invest in the Company continuously, the shareholders can sell the Company’s share in the Stock Exchange of Thailand. Nonetheless, selling shares in the Stock Exchange may have the risk that they might not be able to sell shares with intended volume and price.


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However, the final decision whether to approve the Transaction rests with the Company’s shareholders. The shareholders can consider the opinion provided in the Independent Financial Advisor’s report above as a basis for making your decision.

Yours Faithfully


...................................................... (Mr. Pongsarun Tirmariyabuit)

Financial Advisor

............................................................................................................. (Mrs. UsanaphanVisutthisub and Mrs. Kanchana Kulteerathawat)

Directors

Opinion of the Independent Financial Advisor on Connected ... Encl.6_GJS... · Information of SSG...

Documents

Transcript of Opinion of the Independent Financial Advisor on Connected ... Encl.6_GJS... · Information of SSG...