2005 The former Hitachi Cable News Release
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Notice of merger of Tonichi Kyosan Cable, Ltd. with Tonichi Shoji, Ltd. and merger of Kyotech, Ltd. with Tonichi Densen Kako Co., Ltd.
Hitachi Cable, Ltd. (hereinafter called Hitachi Cable) has decided to merge its subsidiary Tonichi Kyosan Cable, Ltd. (hereinafter called Tonichi Kyosan Cable) with Tonichi Kyosan Cable's subsidiary Tonichi Shoji, Ltd. (hereinafter called Tonichi Shoji), and to merge Tonichi Kyosan Cable's subsidiary Kyotech, Ltd. (hereinafter called Kyotech) with Tonichi Densen Kako Co., Ltd. (hereinafter called Tonichi Densen Kako), another subsidiary. Each of these mergers will take effect October 1, 2005.
1.Reasons for these mergers:
Currently, the Hitachi Cable group is endeavoring to achieve a more appropriate number of group companies, in order to improve group synergy effects and thoroughly promote both activities related to corporate social responsibility (CSR) and reductions in the operating costs of subsidiaries, as well as proceeding with the thorough implementation of existing management policies and the sharing of management strategies.
Based on this policy, Tonichi Kyosan Cable of the Tonichi Kyosan Cable group will acquire Tonichi Shoji, which primarily handles distribution activities, and Kyotech, which primarily handles the manufacture and sale of processed wires and cables, will acquire Tonichi Densen Kako, which conducts similar business activities. These two mergers are intended to improve the Tonichi Kyosan Cable group's business efficiency and to reduce its administrative costs, by strengthening cooperation within the group.
2.Merger of Tonichi Kyosan Cable with Tonichi Shoji
(1) Detailsof this merger:
(i) Effective date of merger:
October 1, 2005 (planned)
(ii) Method of merger:
As the surviving company, Tonichi Kyosan Cable will absorb Tonichi Shoji.
(iii) Consolidation ratio:
As Tonichi Kyosan Cable already owns all shares of Tonichi Shoji stock issued and outstanding, no new shares will be issued in connection with this merger.
(2) Summary of the parties to this merger (as of March 31, 2005):
| Tonichi Kyosan Cable | Tonichi Shoji | |
|---|---|---|
| Representative | President and Representative Director: Koji Muraki | President and Representative Director: Hiroshi Oe |
| Location of headquarters | 1-1 Arakane, Ishioka City, Ibaraki Pref. | 1-1 Arakane, Ishioka City, Ibaraki Pref. |
| Lines of business | Manufacture, assembly, processing, sale, and other activities related to wires, cables, and fiber-optic cables | Packaging, shipping, and other operations for the Tonichi Kyosan Cable group |
| Established | May 1947 | Apr 1987 |
| Capital (millions of yen) |
3,569 | 10 |
| Total shares issued and outstanding |
19,860,000 | 200 |
| Shareholders' equity (millions of yen) |
13,073 | 57 |
| Total assets (millions of yen) | 17,103 | 154 |
| Fiscal year ends | March 31 | March 31 |
| Number of employees | 346 | 44 |
| Major shareholders and percentages of shares held | Hitachi Cable: 100% | Tonichi Kyosan Cable: 100% |
(3) Business performance of the parties to this merger over the three most recent fiscal years
| Tonichi Kyosan Cable (Surviving company) |
Tonichi Shoji (Merged company) |
|||||
|---|---|---|---|---|---|---|
| Fiscal 2003 | Fiscal 2004 | Fiscal 2005 | Fiscal 2003 | Fiscal 2004 | Fiscal 2005 | |
| Sales (millions of yen) |
27,068 | 26,153 | 28,773 | 931 | 982 | 959 |
| Ordinary income (millions of yen) |
-7 | -43 | 22 | 10 | 7 | 37 |
(4) Post-merger summary
| Company name | Tonichi Kyosan Cable, Ltd. |
|---|---|
| Lines of business | Manufacture, assembly, processing, sale, and other activities related to wires, cables, and fiber-optic cables |
| Location of headquarters | 1-1 Arakane, Ishioka City, Ibaraki Pref. |
| Representative | President and Representative Director: Koji Muraki |
| Capital (millions of yen) |
3,569 (As Tonichi Kyosan Cable already owns all shares of Tonichi Shoji stock issued and outstanding, no new shares will be issued in connection with this merger, and amounts of capital shall remain unchanged.) |
| Fiscal year ends | 31-Mar |
(5) Effects of this merger on Hitachi Cable business performance: This merger will have no effect on the non-consolidated business performance of Hitachi Cable. In addition, the effects of this merger on the consolidated business performance of Hitachi Cable are expected to be negligible.
3. Merger of Kyotech with Tonichi Densen Kako
(1) Details of this merger:
(i) Effective date of merger:
October 1, 2005 (planned)
(ii) Method of merger:
As the surviving company, Kyotech will absorb Tonichi Densen Kako.
(iii) Consolidation ratio:
| Kyotech | Tonichi Densen Kako | |
|---|---|---|
| Consolidation ratio | 1.0 | 1.0 |
20,000 ordinary shares of Kyotech stock will be issued in this merger.
(2) Summary of the parties to this merger (as of March 31, 2005):
| Kyotech | Tonichi Densen Kako | |
|---|---|---|
| Representative | President and Representative Director: Yasuhiko Suzuki | President and Representative Director: Yasuhiko Sakamoto |
| Location of headquarters | 825 Kunugi, Toride City, Ibaraki Pref. | 1-1 Arakane, Ishioka City, Ibaraki Pref. |
| Lines of business | Manufacture, sale, and other activities related to processed wires, cables, and other products | Manufacture, sale, and other activities related to processed wires, cables, and other products |
| Established | Feb 1968 | Jul 1979 |
| Capital (millions of yen) |
30 | 10 |
| Total shares issued and outstanding | 60,000 | 20,000 |
| Shareholders' equity (millions of yen) |
79 | 55 |
| Total assets (millions of yen) |
184 | 155 |
| Fiscal year ends | March 31 | March 31 |
| Number of employees | 130 | 42 |
| Major shareholders' and percentages of shares held | Tonichi Kyosan Cable: 100% | Tonichi Kyosan Cable: 100% |
(3) Business performance of the parties to this merger over the three most recent fiscal years
| Kyotech (Surviving company) |
Tonichi Densen Kako (Merged company) |
|||||
|---|---|---|---|---|---|---|
| Fiscal 2003 | Fiscal 2004 | Fiscal 2005 | Fiscal 2003 | Fiscal 2004 | Fiscal 2005 | |
| Sales (millions of yen) |
1,498 | 1,813 | 2,025 | 1,279 | 713 | 625 |
| Ordinary income (millions of yen) |
15 | 20 | 31 | -13 | 14 | 35 |
(4) Post-merger summary
| Company name | Tonichi Kyosan Technos, Ltd. Note: The company name will be changed in connection with this merger. |
|---|---|
| Lines of business | Manufacture, sale, and other activities related to processed wires, cables, and other products |
| Location of headquarters | 1-1 Arakane, Ishioka City, Ibaraki Pref. Note: Company headquarters will relocate in connection with this merger. |
| Representative | President and Representative Director: Yasuhiko Suzuki |
| Capital (millions of yen) |
40 |
| Fiscal year ends | March 31 |
(5) Effects of this merger on Hitachi Cable business performance:
This merger will have no effect on the non-consolidated business performance of Hitachi Cable.
In addition, the effects of this merger on the consolidated business performance of Hitachi Cable are expected to be negligible.