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TOKYO, November 26, 2001 - CSK Corporation (TSE code: 9737) today announced that its board had approved a basic agreement with Unison Capital Partners L.P. ("Unison") to transfer the control of CSK's subsidiary ASCII Corporation ("ASCII") to Unison. The transaction is part of CSK's on-going measures to focus the Group's operations on B2B businesses.
Outline of agreement
(1)Objectives:
CSK has been closely involved with ASCII since initially investing capital in the company in 1997, providing both financial and human resources support. In light of the Group's current policy of focusing on B2B businesses and minimizing peripheral risks, however, it was decided that this continued support should be reviewed. As a consequence, the transfer of control of ASCII to Unison was decided upon.
(2)Transferee:
Unison Capital Partners L.P. is the name of a fund managed by Unison Capital Inc. (Representatives: Nobuyoshi Ebara and Tensei Sayama; Head office: Chiyoda-ku, Tokyo.)
(3)Proposed date of transfer:
March 30, 2002
(4)Method of transfer:
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i) |
Capital reduction and equity consolidation. The amount of capital reduction and percentages of equity consolidation will be decided when concluding the formal agreement, expected to be in late December 2001. |
| ii) |
CSK will transfer ASCII's shares to ASCII free of charge. |
| iii) |
ASCII will cancel the shares received from CSK. |
| iv) |
ASCII will increase capital through a third party allotment of shares to Unison. |
(5)Outline of company to be transferred:
Company outline
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Name of company
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ASCII Corporation
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Main business
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Publication of PC-related magazines and books; development and distribution of software and hardware
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Establishment
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May 1977
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Head office
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4-33-10, Yoyogi, Shibuya-ku, Tokyo 151-8024
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President
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Norikazu Suzuki
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Capital
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¥21,706,834,000
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Shares outstanding
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37,487,000 (as at September 30, 2001)
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Shareholders' equity
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(¥4,954 million)
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Total assets
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¥33,345 million
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Fiscal year
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March 31
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Employees
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532
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Major shareholders
(unit: ' 000 shares, percent)
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CSK
SEGA
Kazuhiko Nishi
Industrial Bank of Japan
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19,400 (51.8%)
4,620 (12.3%)
910 (2.4%)
400 (1.1%)
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Results of past three financial years
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(¥ millions)
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Year ended
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Mar. 31, 2000
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Mar. 31, 2001
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Mar. 31, 2002 (est)
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Net sales
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40,697
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22,075
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17,500
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Operating income (loss)
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1,147
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583
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(1,850)
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Ordinary income (loss)
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278
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224
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(2,300)
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Net income (loss)
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82
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(4,895)
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(6,500)
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Net income per share (¥)
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2.83
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(130.61)
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(173.39)
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Dividend per share (¥)
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---
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---
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---
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Equity capital per share (¥)
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94.45
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(37.30)
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---
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(6)ASCII shares held by CSK:
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i.
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Number of shares currently held: 19,400,000
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ii.
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Number of shares to be transferred: 19,400,000
(book value as at September 30, 2001: ¥6.5 billion)
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iii.
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Number of shares to be held after transfer: None
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Impact of transfer on CSK's results
(1)Consolidated basis:
CSK's consolidated net income is expected to significantly improve as a result of transferring control of ASCII to Unison. Contributing to this will be tax benefits applicable to losses from the transfer of subsidiary shares. Since ASCII's liabilities have exceeded its assets, these losses have been booked in full to CSK's consolidated financial accounts. With this transfer of control, CSK will be able to recover these losses charged in previous years in future consolidated results.
(2)Non-consolidated basis:
The impact of this transfer on CSK's non-consolidated profit and loss statement is expected to be minimal. The tax benefit applicable to losses from the sale of subsidiary shares will offset the negative impact of this transaction on CSK's net income.
(3)Other:
As the official transfer agreement has yet to be finalized, certain elements may be subject to further change. Accordingly, effects of the transfer on consolidated and non-consolidated forecasts for the year ending March 31, 2002 may differ slightly from those mentioned in this document, and will be publicized once the transaction has been formalized.
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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.
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