Bangkok--20 Dec--Fitch Ratings Fitch Ratings-Bangkok/Singapore-19 December 2007: Fitch Ratings (Thailand) Limited said today that PTT Public Company Limited’s (PTT) National ratings are not affected by the Supreme Administrative Court’s ruling that PTT must transfer expropriated land and gas transmission pipelines back to the state. Fitch’s current ratings for PTT are as follows: - National Long-term rating ‘AA+(tha)’ - National Short-term rating ‘F1+(tha)’ - National senior unsecured debentures ‘AA+(tha)’ The rating Outlook is Stable. On 14 December 2007, the Supreme Administrative Court ordered PTT to transfer expropriated land and the rights over some private land properties (legally known as the “right of way”), which PTT had obtained at the time of the corporatisation of the Petroleum Authority of Thailand into PTT, back to the state. This transfer also includes the gas transmission pipelines located on these lands. Details of the asset transfer were discussed between the Minister of Energy, the Ministry of Finance and PTT, resulting in a framework being submitted to the Cabinet for approval, which was given on 18 December 2007. Under the framework, PTT will transfer expropriated land, the rights over some private land properties and the gas pipelines located on these lands, worth approximately THB15 billion (book value as of 30 September 2001), back to the state. However, PTT will have the right to lease back and use the gas pipelines for 30 years, with an annual rental fee at a rate of at least 5% of gas pipeline revenues (only from these parts). According to PTT’s preliminary estimates, the average annual rental fee is approximately THB200 million-300m (based on a 5% sharing rate). To compensate for the past usage, PTT has to pay rental expenses plus a penalty fee for the period of October 2001 up to the transfer date, totaling not more than THB2bn (preliminary estimate) and pay tax expenses on the asset transfer of approximately THB2bn (preliminary estimate). Fitch expects the financial impact on PTT to be limited and should not cause material deterioration to its current strong financial profile. PTT has substantial liquidity and solid operating cash flow to withstand the THB4bn one-time payment, and the THB200m-300m annual rental fee should not significantly jeopardise its gas pipeline’s profitability. PTT generated THB112.3bn of EBITDA and THB88.2bn of funds from operation for the first nine months of 2007 and had THB82.0bn of cash on hand as of 30 September 2007. On the business front, Fitch believes that PTT is likely to maintain its natural monopoly in gas transmission and distribution business for the foreseeable future, given its long-term lease on the gas pipelines that will be transferred back, its owned pipelines network and its long-term gas sale and gas offtake agreement. In addition, this should not materially reduce PTT’s significance to the government as a national oil and gas company. 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, Bangkok, +662 655 4760; Wasant Polcharoen, +662 655 4763; Vincent Milton, Bangkok, +662 655 4759. Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.