Oji Holdings Corporation (hereinafter “Oji Holdings”) would like to announce that it has passed a resolution to form a business alliance as well as capital alliance through third-party stock allocation (hereinafter “business and capital alliance”) with Chuetsu Pulp & Paper Co., Ltd. (hereinafter “Chuetsu Pulp & Paper”), at the Board of Directors’ Meeting which was held today, December 2, 2014. Details are as stated below.
Also note that receipt of a notice from Japan Fair Trade Commission, to the effect that it will not issue a cease and desist order in accordance with Act on Prohibition of Private Monopolization and Maintenance of Fair Trade, is the prerequisite for the execution of the third-party stock allocation.
1. Background to the Business and Capital Alliances
Business environment of pulp and paper industry in Japan has been rapidly changing in the recent years, which can be illustrated by examples such as the structural changes in demand caused by advances of information and communication technology. Under such conditions, Oji Holdings, having implemented measures to improve corporate values of both the companies since the past as the largest shareholder of Chuetsu Pulp & Paper, has decided on a formation of the business and capital alliance in its aim to further increase investment and capital efficiencies through mutual leverage of management resources.
Through the business and capital alliance, Oji Holdings will drive forward its cost rationalization measures as well as entry into new business fields further than ever before to enhance its corporate value.
2. Contents of the Business and Capital Alliances
(1) Business alliance
a) Collaborative procurement of imported raw materials and biomass fuels as well as collaborative operation of chip carriers
b) Mutual technical cooperation and assistance
c) Collaborative procurement of materials and collaborative distribution of goods
d) Collaborative alliance in growing business fields
(2) Capital alliance
Chuetsu Pulp & Paper will issue 16,892,000 of new stocks (common stock) and sell off 108,000 of treasury stocks through the third-party stock allocation, and Oji Holdings will subscribe for all of these stocks. As a result, Chuetsu Pulp & Paper will become an equity-method affiliate of the Oji Holdings, with Oji Holdings’ stock ownership ratio of Chuetsu Pulp & Paper reaching 20.8% (Oji Holdings 20.6%, Oji Holdings’ affiliate 0.2%) and proportion of voting rights reaching 20.9%.
3. Overview of the Alliance Partner
|(1) Name||Chuetsu Pulp & Paper Co., Ltd.|
|(2) Location||10-6, Ginza 2-chome, Chuo-ku, Tokyo, Japan|
|(3) Representitive||Akiyoshi Kato|
|(4) Business lineup||Production and sales of pulp and paper products, electric generation|
|(5) Paid-in capital||¥17,259 million|
|(6) Date of foundation||February 1947|
|(7) Major shareholders and their stock ownership ratio|
|Oji Holdings Corporation||9.03%|
|Japan Pulp and Paper Co., Ltd.||6.09%|
|Japan Trustee Services Bank, Limited (Trust Account)||6.05%|
|Hokuriku Financial Group, Inc.||4.92%|
|Shinsei Pulp & Paper Co., Ltd.||4.84%|
|Kokusai Pulp & Paper Co., Ltd.||4.58%|
|Japan Trustee Services Bank, Limited (Trust Account 4)||3.47%|
|Mizuho Bank Limited||3.44%|
|The Norinchukin Bank||3.44%|
|Mitsui Sumitomo Insurance Company, Limited||2.03%|
|(8) Relationship with Oji Holdings|
|Capital relationship||Chuetsu Pulp & Paper's stocks held by Oji Holdings||10,539,140 stocks|
|Oji Holdings' stocks held by Chuetsu Pulp & Paper||500,000 stocks|
|Personal relationship||There is no special interest relationship that should be stated. Nonetheless, there is an agreement under the business and capital alliance contract, subject to the completion of the third-party stock allocation payment, to dispatch one officer from Oji Holdings to Chuetsu Pulp and Paper.|
|Business relationship||Oji Holdings sells its products to Chuetsu Pulp & Paper|
|Related parties||Chuetsu Pulp & Paper does not correspond to related parties of Oji Holdings.|
|(9) Financial conditions and operating results (past three years)|
|Consolidated net assets||¥50,198 million||¥49,781 million||¥49,870 million|
|Consolidated total assets||¥132,907 million||¥130,696 million||¥132,997 million|
|Consolidated net assets per share||¥430.59||¥427.08||¥427.89|
|Consolidated net sales||¥100,637 million||¥90,506 million||¥99,721 million|
|Consolidated operating income||¥3,669 million||¥258 million||¥3,026 million|
|Consolidated ordinary income||¥3,515 million||¥380 million||¥2,943 million|
|Consolidated net income||¥1,100 million||¥249 million||¥531 million|
|Consolidated net income per share||¥9.45||¥2.14||¥4.56|
|Dividened per share||¥6.00||¥4.00||¥4.00|
|(1) Board of Directors' Meeting||December 2, 2014|
|(2) Execution of the business and capital alliances contract||December 2, 2014|
|(3) Payment period||December 18, 2014 to May 29, 2015|
5. Future Business Projection
Although the alliance has a small influence on Oji Holdings’ consolidated business performance of the year ending March 2015, it would contribute to improving our consolidated business performance in the medium- to long-term.
General Manager, Corporate Planning Department, Corporate Planning Division,
Oji Management Office Inc.