Fitch Assigns The Erawan Group’s Senior Unsecured Debt ‘BBB(tha)’

Fitch Ratings (Thailand) Limited has today assigned the senior unsecured debt of The Erawan Group Plc (“Erawan”) a National Long-term rating of ‘BBB(tha)’ and a National Short-term rating of ‘F3(tha)’. The rating Outlook is Stable. The ratings reflect Erawan’s high-quality assets, strong brand recognition and established relationship with leading international hotel chains – Hyatt and Marriott. All of the company’s core assets are sited on premium locations at the centre of Bangkok. Its hotels, Grand Hyatt Erawan Bangkok (“GHEB”) and JW Marriott (“JWM”), are recognised for their high quality services. The ratings also incorporate Erawan’s existing low product and geographic diversification as well as expected stronger competition in Bangkok’s hotel sector. This concern, however, should be alleviated through the company’s geographical and segmental expansion plans, which will be completed in 2007. The lodging sector is sensitive to economic cyclicality and travel shocks. This was clearly witnessed during 2Q03 when the Severe Acute Respiratory Syndrome (“SARS”) outbreak severely affected the sector. The risk of increased worldwide terrorism and the potential negative effect on the economy of high oil prices are also credit concerns. While there has been a significant decline in Erawan’s consolidated debt over the past few years, the group’s financial leverage remains relatively high with an adjusted net debt/EBITDAR ratio of 4.7x at end-2004. Given its sizeable planned capital investment, Erawan’s leverage is likely to increase in 2005 before gradually declining thereafter. In addition, execution risk is associated with its new investments, although this should be partly alleviated via the management arrangements with international hotel operators. Meanwhile, the structural subordination resulting from the high secured and subsidiary debt (accounting for about 80% of the group’s debt at end-1H05) also affects the recovery potential of Erawan’s senior unsecured debt. Erawan acts as a short-term funding vehicle for the group via equity injection or inter-company loans while long-term funding is carried out at the subsidiary level. Cash flow from subsidiaries can be upstreamed in the form of dividend payment or inter-company loans. Dividends from subsidiaries are generally set at a 100% payout ratio. During 1H05, the group’s debt structure mainly consisted of Erawan’s unsecured and secured debt as well as the secured debt of its two principal subsidiaries. Of the group’s total debt portfolio, 20% was short-term and 80% long-term. Nonetheless, the short-term debt portion is likely to increase in 2006 and 2008 as back-loaded loans at two subsidiaries become due. Given the expected strong operations and manageable debt level of the two subsidiaries, the refinancing risks should be relatively moderate. At 1H05, Erawan’s consolidated cash stood at THB174 million with a THB763m committed short-term bank facility still undrawn. During 3Q05, Erawan drew an additional THB345m short-term bank facility to fund its investments. The company intends to convert this short-term loan into a long-term loan by end-2005. The Stable Outlook reflects the company’s strong asset quality and an expected gradual decline in its leverage over the next 18 to 24 months. CONTACT: Orawan Karoonkornsakul, Vincent Milton; Bangkok, +662 655 4755 Note to Editors: Fitch’s National ratings provide a relative measure of creditworthiness for rated entities in countries with sub- or low-investment grade international sovereign 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. 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. End.

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