Bangkok--24 Jul--Fitch Ratings Fitch Ratings (Thailand) Limited has today placed the ‘A-(tha)’ (A minus(tha)) National Long-term ratings of Aromatics (Thailand) Public Company Limited’s (ATC) secured and amortising debentures on Rating Watch Positive following its announcement to merge with Rayong Refinery Public Company Limited (RRC). Fitch expects to resolve the Rating Watch on ATC upon the completion of the merger. The rating action is based on Fitch’s expectation that the merger will strengthen ATC’s business profile; enhance its economies of scale and increase its production integration — which will lead to greater operating flexibility (in terms of feedstock and product optimization) and reduced earnings volatility. Following the merger, the agency also expects that RRC’s lower leverage will result in a lower leverage for the merged company. The merger, via an amalgamation method, will involve a share swap between the shareholders of ATC and RRC, and the merged company; there will be no capital injection or share acquisition from either party. The shareholding of PTT Public Company Limited’s (PTT) in the merged company is likely to be similar to that of ATC and RRC before the merger at around 49%. RRC is a single-site oil refinery with a current capacity of 145k barrels per day (bpd), equal to 14% of the country’s refining capacity. Its capacity will increase to 210kbpd by 2008 after the completion of its expansion project. RRC’s refinery is one of the most complex in Thailand and the Asia Pacific region, with high upgrading-to-refining and hydrotreating-to-refining ratios. The company produces a high proportion of light and middle refined oil products, altogether accounting for around 85% of total output. PTT supplies 100% of crude oil and offtakes at least 70% of the products. Note to Editors: Fitch’s National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated ‘AAA’ and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as ‘AAA(tha)’ for National ratings in Thailand. Specific letter grades are not therefore internationally comparable. Contacts: Lertchai Kochareonrattanakul, Wasant Polcharoen, Vincent Milton; Bangkok, +662 655 4755