The company's board yesterday endorsed the investment, to be paid at the common share price and the convertible debenture price of Bt14 per share. PTT and Bangchak expect to enter into a share-subscription agreement by the second quarter.

After the purchase of the common shares and convertible debentures, PTT's ownership in Bangchak - including shares held through Siam DR - will increase from 7.6 per cent to about 30 per cent.

However, PTT has obtained a waiver of the mandatory tender offer from Bangchak's shareholders, with consent from the Securities and Exchange Commission.

PTT's board also agreed that the company could enter into a commercial agreement with Bangchak for crude supply and products off-take, effective for 12 years after the completion of construction and the commencement of commercial operation of the Product Quality Improvement project (by the end of 2008).

The agreement is expected to be signed by the middle of the year.