PRESS RELEASE: Italian-Thai Development PLC Wednesday, 9 October 1996 TRIS affirms an “A” rating to ITD’s senior debt Thai Rating and Information Services (TRIS) affirmed an “A” rating for Italian-Thai Development PLC’s (ITD) 3,500 million baht senior debentures on 9 October 1996. The rating reflects the company’s strong market position, proven ability to complete work on time and sound financial profile. Severe market rivalry characterized by price-cutting and diminishing profit margins affects its performance. The company’s overall business standing also depends on future returns from ongoing highly-capitalized investments. ITD is the largest local contractor operating in various construction sectors, locally and internationally. It is well-diversified to ensure its self-sufficiency, stabilize its income stream and enhance its opportunity to win contracts from its strategic partners. ITD has established a strong business relationship with government agencies and adopted strategic alliances with potential customers, financiers and major contractors in the marketplace. Based on accurate costing and efficient project management practices ITD has developed a construction competence and also has access to cost effective and reliable subcontractors. The company enjoys customer confidence and has a reputation for good quality construction. It has experienced steady growth and has maintained a relatively high level of work on-hand despite intense market competition. In September 1996, its backlog of 92 contracts amounted to 40,588 million baht, about 32% from the Bangkok Mass Transit System project. The remaining projects were mainly in transportation, buildings, industrial plants, telecommunication and pipeline work and utilities. ITD has raised enormous funds to expand its construction businesses and to participate in various investments. Debts have progressively increased to 7,737 million baht with the total debts to capitalization ratio of 45.8% in June 1996. Overall profitability, once solid with more-than-20% pretax return on permanent capital, dropped to 16.7% in 1995. Its ability to pay interest and repay principal has declined. Pretax interest coverage was at 4.1 times, and funds from operations covered 25.7% of total debts last year. ITD has planned to extend its business operations across market segments and geographical regions. In the next two years more than 5,000 million baht will be invested in new ventures.Note: Italian-Thai Development PLC: Rating assigned Senior debt: 3,500 million baht debentures A