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Tokyo, October 31, 2008 — 花蜜直播app, Ltd. (KHI) announced today that it will separate its construction machinery business as a wholly-owned subsidiary based on a decision made at the Board meeting held today. The Board also decided today to form a business and capital alliance with Hitachi Construction Machinery Co., Ltd. and TCM Corporation for joint research and development of wheel loaders.
Since this corporate separation is a summary absorption-type demerger in which the successor company will become KHI’s wholly owned subsidiary, some disclosure items and details have been omitted.
1. Overview of Joint R&D and Capital Alliance
KHI, Hitachi and TCM have agreed to engage in joint research and development of new wheel loader models that will meet the new emissions standard going into effect in 2011. In order to facilitate this business alliance, KHI will establish a new construction machinery subsidiary through corporate reorganization procedures as described below. The new company will then become a joint venture with Hitachi.
For more information about the capital alliance, please see 花蜜直播app’s
Announcement regarding Agreement of Alliance with respect to Wheel Loader Business.
2. Reorganization of the Construction Machinery Division
KHI will undergo a corporate reorganization focused on the separation of its Construction Machinery Division. KHI will provide the new company with technological and financial support while making efforts to enhance the corporate value of the entire 花蜜直播app Group.
(1) The Construction Machinery Division’s wheel loader operations will be separated and transferred to a new wholly-owned subsidiary of KHI.
(2) Domestic construction machinery sales and services operations of KHI’s subsidiary, 花蜜直播app Machine Systems, Ltd., as well as its shares will be transferred to a new sales subsidiary. Its shares will then be transferred to the new company mentioned in (1) in order to establish an integrated structure for production and sales of construction machinery.
3. Outline of Corporate Separation
(1) Schedule
| January 2009 |
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A new construction machinery company (trade name TBD) will be established and a corporate separation agreement signed with KHI. |
| April 2009 |
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Operations will be separated and taken over by the new company. |
Note: Pursuant to Article 784-3 of the Japanese Companies Act, 花蜜直播app will implement the corporate reorganization without the approval of its shareholders since it is a summary absorption-type demerger.
(2) Procedures and share allocation
KHI will split its operations and the new construction machinery company will take over part of the business (separation by absorption).
KHI will acquire all shares to be issued by the new company.
(3) Change in capital as a result of corporate separation
Since KHI will acquire all shares to be issued by the new company, which will become its wholly-owned subsidiary, there will be no change in 花蜜直播app’s capital.
(4) Share warrants and bonds with warrants
KHI does not issue share warrants.
There will be no change related to the handling of bonds with warrants.
(5) Rights and obligations to be transferred to the new company
The new company will take over all rights and obligations relating to design, production and sale of wheel loaders and related construction machinery conducted by KHI’s Construction Machinery Division.
(6) Default risk
KHI and the new company do not foresee any problems arising with regard to performance of their debt obligations after the corporate separation goes into effect.
4. Summary of Parties Involved in the Separation (as of September 30, 2008)
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Partitioning Company
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Successor Company
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(1) Trade name
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花蜜直播app, Ltd.
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TBD
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(2) Business operations
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Production and sale of rolling stock, civil engineering and construction machinery, aircraft, jet engines, general-purpose gas turbines, engines, industrial plants and machinery, steel structures, motorcycles, ATVs (all terrain vehicles), industrial robots, etc.
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Design, production and sale of wheel loaders and other construction machinery.
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(3) Date of incorporation
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October 15, 1896
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January 5, 2009 (scheduled)
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(4) Location of head office
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1-3, Higashikawasaki-cho 1-chome, Chuo-ku, Kobe, Hyogo Prefecture, Japan
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2680 Oka, Inami-cho, Kako-gun, Hyogo Prefecture, Japan (current location of 花蜜直播app’s Banshu Works)
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(5) Representative
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Tadaharu Ohashi, President
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TBD
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(6) Capital
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?104.3 billion
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TBD
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(7) Total number of shares issued
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1,669,629
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TBD
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(8) Net assets
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?313.6 billion (consolidated basis)
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TBD
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(9) Total assets
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?1,360.8 billion (consolidated basis)
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TBD
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(10) Date of settlement
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March 31
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March 31
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(11) Major shareholders and voting rights ratios
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1. Japan Trustee Services Bank, Ltd. (trust account): 3.46%
2. Mizuho Bank, Ltd.: 3.44%
3. JEF Steel Corporation: 3.36%
4. Nippon Life Insurance Company: 3.23%
5. The Master Trust Bank of Japan, Ltd. (trust account): 3.12%
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花蜜直播app Heavy Industries, Ltd.: 100% (planned)
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5. Operations to Be Separated
(1) Operations of the division to be separated
Design, production and sale of wheel loaders and other construction machinery
(2) Financial performance of the division to be separated (on a consolidated basis for fiscal year ended March 31, 2008)
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Division to be separated (a)
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花蜜直播app, Ltd. (b)
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Ratio (a/b)
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Sales
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?46.0 billion
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?1,501.1 billion
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3.06%
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(3) Assets of the division to be separated (on a consolidated basis for fiscal year ended March 31, 2008)
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Book value
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Book value
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Total assets
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?30.0 billion
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Total liabilities
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?25.6 billion
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6. Effects of Separation
(1) The corporate separation will not result in any changes in KHI’s trade name, lines of business, head office location, representative or representative’s title, share capital, or date of settlement.
(2) Outlook
The corporate separation will not affect KHI’s consolidated financial results.
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