TOKYO, January 31, 2001 - CSK Corporation (TSE: 9737) today announced that its board of directors has approved a series of initiatives aimed at strengthening the balance sheet and business of group member CSK Electronics Corporation (OTC: 8073). Key steps in the plan include a recapitalization of CSK Electronics, transfer of high-margin IT services to the affiliate, and secondment of personnel.

CSK Corporation intends to subscribe to a third-party share allotment that will increase CSK Electronics' capital by an anticipated ¥:18.0 billion. This plan, subject to market conditions, calls for CSK Corporation to purchase 86,900,000 newly issued CSK Electronics shares priced at ¥:207 each. The transaction is scheduled to occur on February 27, 2001.

CSK Corporation additionally intends to transfer to CSK Electronics the group's IT-related maintenance and later similarly transfer CSK Corporation's procurement function. Full consolidation of these services will enhance overall group efficiency, enable a systematic approach that best responds to small- and medium-size business needs, and optimize procurement costs for customers and suppliers.

CSK Corporation also plans to second key personnel to CSK Electronics to provide additional support and to ensure smooth and efficient integration of the new businesses.

CSK Electronics initiated restructuring efforts in late 1998, focusing much of its improvement efforts on its nationwide T-ZONE retail computer outlets. Through the year ended March 31, 2000, the company steadily improved annual turnover, enhanced gross margin through inventory control, and reduced sales and administrative costs by closing unprofitable retail stores. Despite these efforts, intensified competition and a further decline in PC prices led to a consolidated ¥:927 million net loss in the interim period ending September 30, 2000.

Corporate information

CSK Corporation, established in 1968, is one of Japan's leading providers of information and communications technology. The CSK Group comprises a full spectrum of solutions, entertainment, and support companies, including SEGA Corporation, BellSystem24 Inc., NextCom K.K., and ASCII Corporation. On November 24, 2000, CSK Corporation reported consolidated half-year net sales of ¥:198.7 billion, operating income of ¥:3.6 billion, and a net loss of ¥:13.5 billion.

CSK Electronics Corporation (OTC: 8073), established in 1975, is a leading marketer of electronic devices, personal computers, peripherals, and amusement-related devices. It also operates T-ZONE, one of Japan's leading personal computer specialty retailers.