(Note) This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.
September 28, 2016 Company name: Tokuyama Corporation Representative: Hiroshi Yokota, President and Representative Director (Code No. 4043, First Section TSE)
Contact: Taro Kobayashi, General Manager Corporate Communications & Investor Relations Dept.
TEL: +81-3-5207-2552
Notice concerning Third-Party Allotment of the New Shares and Transfer of the Shares of Consolidated SubsidiaryWith a resolution at a meeting of Board of Directors held today, Tokuyama Corporation (hereinafter referred to as the "Company," "Tokuyama" or "we") hereby announces that the Company's consolidated subsidiary in Malaysia, Tokuyama Malaysia Sdn. Bhd. (hereinafter referred to as "Tokuyama Malaysia") will issue new shares to OCI Company Ltd. in Korea (hereinafter referred to as "OCI") as a third-party allotment and the Company will transfer all shares of Tokuyama Malaysia to OCI.
As a consequence of the above-mentioned transactions, Tokuyama Malaysia will be excluded from the consolidation of the Company.
Reason for the Third-Party Allotment of New Shares and Transfer of Shares
Tokuyama Malaysia was established in August 2009 to expand the semiconductor-grade and solar-grade polycrystalline silicon business. Due to the technological issues of manufacturing facilities and deteriorating market condition of solar-grade polycrystalline silicon, two huge impairment losses in connection with plants were posted. To continue Tokuyama Malaysia's business, the efforts to improve the manufacturing facilities and the productivity were taken, and certain level of productivity has been achieved. In addition, to further strengthen Tokuyama Malaysia's business structure, the Company has been evaluating every option including Tokuyama Malaysia's alliance with other company.
As a result, the Company has reached to the conclusion that transferring the business of Tokuyama Malaysia to OCI, a global player of solar power business including the production of polycrystalline silicon, will be the best choice for parties, and finally the Company reached an agreement with OCI about the third-party allotment of new share and transfer of shares of Tokuyama Malaysia to OCI.
Outline of the consolidated subsidiary whose shares are to be transferred
(1)
Name
Tokuyama Malaysia Sdn. Bhd.
(2)
Location
Samalaju Industrial Park, Sarawak, Malaysia
(3)
Name and Title of
Representative
Hiroshi Nomura (President and Representative Director)
(4)
Business
Production and sale of polycrystalline silicon
(5)
Capital
6,567 million yen
(6)
Date of Establishment
August 18, 2009
(7)
Major Shareholder and
Ratio of Shareholding
Tokuyama Corporation 100%
(8)
Relationships between the Parties
Capital Relationship
Relevant company is Tokuyama's consolidated subsidiary and Tokuyama's ratio of shareholding is
100%.
Personnel Relationship
One executive officer and four employees of Tokuyama serve five board members of the relevant company concurrently. No related parties or affiliates of Tokuyama have any significant personnel
relationship with the relevant company.
Transaction
Relationship
Tokuyama is lending the fund to the relevant company.
(9)
Results of Operations and Financial Conditions for Previous Three Fiscal Years
(Expressed in millions of Japanese Yen unless otherwise specified)
Fiscal Year Ended
March 2014
March 2015
March 2016
Net Assets
126,355
32,582
(101,551)
Total Assets
208,965
148,936
22,298
Sales
-
4,387
8,849
Operating Loss
(952)
(4,344)
(10,298)
Ordinary Loss
(2,099)
(6,987)
(11,449)
Net Loss
(2,099)
(93,772)
(135,475)
Outline of the other party of the third-party allotment and the share transfer
(1)
Name
OCI Company Ltd.
(2)
Location
94, Sogong-ro, Jung-gu, Seoul, Korea
(3)
Name and Title of
Representative
Lee Woo Hyun (President and Representative Director)
(4)
Business
Production and sales of inorganic chemicals, petro and coal chemicals,
fine chemicals, and raw materials for solar panels
(5)
Capital
127,247 million Korean Won
(6)
Date of Establishment
August 5, 1959
(7)
Net Assets
3,242,206 million Korean Won
(8)
Total Assets
7,298,775 million Korean Won
(9)
Major Shareholders and Ratios of Shareholdings
Lee Soo-Young 10.92 %, National Pension Service 10.33 %, Samsung Asset Management Company, Ltd. 6.44%,
Lee Hwa-Young 5.43%, Lee Bok-Young 5.40%
(10)
Relationships between
the Parties
Capital
Relationship
Tokuyama and the relevant company have no
significant capital relationship.
Personnel
Relationship
Tokuyama and the relevant company have no
significant personnel relationship.
Transaction
Relationship
Tokuyama and the relevant company have no
significant transaction relationship.
Status as a
Related Party
The relevant company does not belong to Tokuyama's
related parties.
The outline of third-party allotment
(1)
Number of shares to be issued
First allotment 50,000,000 shares
(Tokuyama's shareholding after the first allotment: 83%)
Second allotment 210,000,000 shares
(Tokuyama's shareholding after the second allotment: 49%)
(2)
Amounts of procurement funds
USD 24 million (first allotment)
USD 78 million (second allotment)
(3)
Allottee
OCI Company Ltd.
(4)
Payment date
First allotment October 7, 2016 (planned)
Second allotment March 31, 2017 (planned)
* The third-party allotment and share transfer to OCI will be subject to the acquisition of permission of notification or the like regarding business combination from competition authorities of the relevant countries.
The number of shares to be transferred and the status of the shares before and after the transfer
(1)
Number of shares before the transfer
252,356,839 shares (Tokuyama's shareholding: 49%)
(2)
Number of shares to be transferred
252,356,839 shares
(3)
Transfer price
USD 98 million
(4)
Number of shares after the transfer
0 shares (Tokuyama's shareholding: 0%)
Timetable
(1)
Resolution of the Company's Board of Directors relating to the
transfer of shares
September 28, 2016
(2)
Conclusion of share transfer agreement
September 29, 2016 (planned)
(3)
OCI's payment for third-party allotment (First allotment)
October 7, 2016 (planned)
(4)
OCI's payment for third-party allotment (Second allotment)
March 31, 2017 (planned)
(5)
Share transfer
March 31, 2017 (planned)
Extraordinary Loss and Future Prospect
As a consequence of the above-mentioned transactions, Tokuyama Malaysia will be excluded from the consolidation of Tokuyama. With the transfer of Tokuyama Malaysia to OCI, it is expected that around 8 billion yen of loss on business transfer will be recorded as the extraordinary loss during the fourth quarter of the fiscal year ending March 31, 2017, however, the total amount of loss would be changed due to the performance of Tokuyama Malaysia until the exclusion from the consolidation or other factor. The tax expense for the fiscal year ending March 31, 2017 is expected to be reduced by around 8 billion yen as a result of above transactions.
Any impact of the share transfer on Tokuyama's consolidated financial results for the fiscal year ending March 31, 2017, is currently being assessed. If and when a material impact is expected, Tokuyama will make a timely announcement as the impact is fixed.
Tokuyama Corporation published this content on 28 September 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 28 September 2016 07:05:01 UTC.
Original documenthttp://www.tokuyama.co.jp/eng/ir/pdf/2016/20160928_Release.pdf
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