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TOKYO, December 21, 2001 - CSK Corporation (TSE code: 9737) today announced that its board had formally approved a contract with Unison Capital Partners L.P. ("Unison") to transfer the control of CSK's subsidiary ASCII Corporation ("ASCII") to Unison.
Outline of contract
(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 K.K. (Representatives: Nobuyoshi Ebara and Tensei Sayama; Head office: Chiyoda-ku, Tokyo.)
(3) Proposed date of transfer:
March 30, 2002
(4) Method of transfer:
| i) |
Capital reduction and equity consolidation. Capital will be reduced by 90% from ¥21,706 million to ¥2,170 million. |
| 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
|
| As at September 30, 2001 |
| Name of company |
ASCII Corporation |
| Main business |
Publication of PC-related magazines and books; development and distribution of software and hardware |
| Establishment |
May 1977 |
| Head office |
4-33-10, Yoyogi, Shibuya-ku, Tokyo 151-8024 |
| President |
Norikazu Suzuki |
| Capital |
¥21,706 million |
| Shares outstanding |
37,487,000 |
Shareholders' equity
(consolidated) |
(¥7,581 million) |
Total assets
(consolidated) |
¥26,425 million |
| Fiscal year |
March 31 |
| Employees |
384 |
Major shareholders
(Unit: thousand shares,
percent)
|
| CSK | 19,400(51.8%) |
| Sega | 4,620(12.3%) |
| Kazuhiko Nishi | 910(2.4%) |
| Industrial Bank of Japan | 400(1.1%) |
|
| Results of past three financial years (consolidated) |
|
|
|
| (¥ millions unless noted) |
| Year ended |
Mar. 31, 2000 |
Mar. 31, 2001 |
Mar. 31, 2002
(est) |
| Net sales |
45,838 |
42,779 |
37,000 |
| Operating income (loss) |
432 |
(18) |
(1,700) |
| Ordinary income (loss) |
(461) |
(504) |
(2,000) |
| Net income (loss) |
(551) |
(5,936) |
(3,200) |
| Net income per share (¥) |
(18.90) |
(158.41) |
(85.36) |
| Dividend per share (¥) |
--- |
--- |
--- |
| Equity capital per share (¥) |
27.15 |
(132.16) |
--- |
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(6) ASCII shares held by CSK:
| i. |
Number of shares currently held: 19,400,000 |
| ii. |
Number of shares to be transferred: 19,400,000
(book value as at September 30, 2001: ¥6.5 billion) |
| iii. |
Number of shares to be held after transfer: None |
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:
The affect of this transfer on results will be publicized in consolidated and non- consolidated forecasts for the year ending March 31, 2002 once they have been formally confirmed.
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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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