Showa Denko K.K. (SDK) to Split and Transfer GaN LED Business
Tokyo, Oct 23, 2012 - (JCN Newswire) - Showa Denko K.K. (SDK) decided at its
board meeting today to split and transfer its gallium-nitride (GaN) LED
epitaxial wafer/chip business to its wholly owned subsidiary TS Opto Co., Ltd.
(TS Opto). SDK and TS Opto today concluded an absorption-type company split
(Since this is a case of "simplified absorption-type company split"
involving SDK and its wholly owned subsidiary, part of the details are omitted
from the scope of disclosure.)
1. Purpose of company split
GaN LEDs are used in many applications, including LCD TV/PC backlight and
illumination, and their demand is expected to grow in the coming years. As the
market requires more energy-saving and lower-cost product, it is necessary for
GaN LED manufacturers to improve LED brightness and production efficiency while
expanding supply capacity.
Under the circumstances, SDK had already reached basic agreement with Toyoda
Gosei Co., Ltd. (Toyoda Gosei), a world leader in the GaN LED business, to
establish a joint venture in order to strengthen the business. This time, SDK
has decided to transfer its GaN LED business to TS Opto effective December 1,
2012 through an absorption-type company split, and transfer 70% of common
shares in TS Opto to Toyoda Gosei on the same date, thereby making TS Opto a
joint venture between SDK and Toyoda Gosei. The absorption-type company split
is a measure to achieve the above-mentioned goal.
2. Outline of company split
Today, SDK approved the absorption-type company split agreement at its board
meeting, and TS Opto approved the same agreement at its shareholders'
meeting. Also today, the agreement was concluded between the two companies. The
agreement is scheduled to take effect on December 1, 2012.
Note: This transaction falls under the category of a simplified company split
for SDK, which is the splitting company. Thus, SDK will not refer the company
split agreement to its shareholders' meeting for approval.
(b) Method of split
This will be an absorption-type company split, with SDK serving as the
splitting company and TS Opto as the succeeding company.
(c) Allotment of TS Opto shares following the company split
TS Opto will deliver 19,400 common shares to SDK at the time of the
absorption-type company split.
(d) Handling of share options and bonds with share options, for the splitting
While SDK has issued Euro-Yen convertible bonds with warrants (with
subordination clause) due 2014, this transaction will have no influence.
(e) Change in capital stock following the split
There will be no increase or decrease in the amount of SDK's capital
(f) Rights and obligations to be transferred
With regard to the rights and obligations pertaining to SDK's GaN LED
business, TS Opto will succeed to rights and obligations as defined in the
absorption-type company split agreement.
(g) Prospect for the discharge of liabilities
As for the liabilities TS Opto will assume following the absorption-type
company split, we consider that there will be no problem with regard to their
3. Profile of the two companies involved in the company split agreement (As of
October 23, 2012)
See original press release.
4. Outline of the business division to be split
(a) Scope of business subject to split:
SDK's production of GaN LED epitaxial wafers and chips
(b) Performance of the business division to be split (as of December 31,
Net sales: JPY 5,322 million
(While sales activities will not be transferred to TS Opto, SDK will stop
selling GaN LEDs as of the effective date, in principle.)
(c) Items of assets and liabilities to be split, and their amounts (as of
December 31, 2011):
Current assets: None
Current liabilities: JPY 182 million
Noncurrent assets: JPY 1,500 million
Noncurrent liabilities: None
5. Situation of the listed company and the succeeding company after split
See original press release.
6. Future prospect
This company split will have only slight influence on SDK's consolidated
and non-consolidated performance. There is no change in our consolidated
performance forecast for 2012 due to this absorption-type company split.
Please see the original press release at:
About Showa Denko
Showa Denko K.K. ('SDK'; TSE: 4004, US: SHWDF) is a major
manufacturer and marketer of chemical products serving a wide range of fields
ranging from heavy industry to the electronic and computer industries. SDK
makes petrochemicals (ethylene, propylene), aluminum products (ingots, rods),
electronic equipment (hard disks for computers) and inorganic materials
(ceramics, carbons). The company has overseas operations and a joint venture
with Netherlands-based Montell and Nippon Petrochemicals to make and market
polypropylenes. In March 2001, SDK merged with Showa Denko Aluminum Corporation
to strengthen the high-value-added fabricated aluminum products operations, and
is today developing next-generation optical communications-use wafers. For more
information, please visit www.sdk.co.jp .
Showa Denko K.K. (SDK)
IR & PR Office
Copyright 2012 JCN Newswire. All rights reserved. www.japancorp.net
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