TRANSLATION - FOR REFERENCE ONLY –
To whom it may concern:
May 29, 2006
Company Name:
Tobishima Corporation
President:
Toshiaki Ikehara
Securities Code:
1805 TSE 1st Section
Notice Regarding Proposed Reduction in Capital and
Additional Paid-in Capital
Tobishima Corporation, at the meeting of its board of directors held today, resolved that
the company shall submit a agenda for “the Reduction in Capital and Additional Paid-in
Capital” to its general shareholders meeting to be convened on June 29, 2006, as
described below.
Description
1. Purpose of the reduction in capital and additional paid-in capital
Out of 35 billion yen of the unsecured convertible bonds with preemptive rights
issued as the second issuance on December 2005, 20 billion yen was converted to
the company’s common stock as of March 31, 2006 (additional 6 billion yen has
been converted up to today, the total amount reaching 26 billion yen), increasing in
its equity capital and fund for cancellation of preferred stocks.
Accordingly its
financial base has significantly been strengthened, while its accumulated
undisposed losses reached 29.6 billion yen as of March 31, 2006.
The company intends to reduce its capital and the total amount of additional paid-in
capital for elimination of accumulated losses, and for securing of flexibility in our
financial plans for resumption of dividends and cancellation of preferred stock.
2. Outline of the reduction in additional paid-in capital
(1) Amount to be reduced
The company’s additional paid-in capital of ¥28,296,688,284 and other capital
surplus of ¥9,616,000 will be totally reduced and appropriated for elimination of its
losses.
3. Outline of the reduction in capital
(capital reduction without any payment to its
shareholders and any change in the number of stocks issued)
(1) Amount to be reduced
The capital of ¥30,421,223,741 as of March 31, 2006 will be reduced by
¥27,921,223,741 to ¥2,500,000,000.
Out of ¥27,921,223,741 of the capital reduction, the company intends to apply
¥1,265,290,746 to the losses to be carried forward to the next period, and to post the
balance of ¥26,655,932,995 to other capital surplus for retained earnings.
(2) Methods of the capital reduction
The capital reduction will be made without any payment to shareholders.
Since the
total elimination of the accumulated losses is to be accomplished by transfer of the
amount among capital accounts in shareholders’ equity and the number of stocks
issued is unchanged, it causes no impact on the amount of net assets, nor
book-value per share.
4. Schedule (planned)
(1) Date of resolution by the Board of Directors:
May 29, 2006
(2) Date of resolution of the General Shareholders Meeting
June 29, 2006
(3) Effective date of reduction in additional paid-in capital
June 29, 2006
(4) Deadline for creditors’ demurral period
August 7, 2006
(5) Effective date of capital reduction
August 8, 2006
-End-
【 Reference 】
1. Outline of the agenda of the General Shareholders Meeting
・ Elimination of accumulated losses through
(1) Disposition of loss
reduction in additional paid-in capital.
・Elimination of accumulated losses and increase
(2) Capital reduction
in capital surplus for acquisition of the preferred
stocks by capital reduction. As the number of
stocks issued is unchanged and the capital is
reduced without compensation, it causes no
change in the number of shares owned by each
shareholders, and book-value per share.
・ Revision to the Articles of Incorporation in
(3) Others
accordance with the enforcement of the new
company law, and election of 7 members of the
Board of Directors.
2. Projection for our future capital structure, upon approval of the agenda (1) and (2)
as described above by shareholders in the general shareholders meeting to be held
on June 29, 2006.
(JPY billion)
As of
Mach
2006
CB converted in (1) Disposition of
current period
As of today
loss
Total
(2) Capital
Outstanding CB to
reduction
be converted
Total
Total
33.4 ▲27.9
Capital
30.4
3
33.4
Capital Surplus
28.3
3
31.3 ▲28.3
3
28.3
3
31.3
▲28.3
3
26.6
Projected
Total
5.5
4.5
10
29.6
4.5
34.1
3
4.5
7.5
Additional
Paid-in Capital
Other
Capital
0
0
Deficit
▲29.6
▲29.6
Others
0.1
0.1
Surplus
0
26.6
26.6
26.6
▲1.3
1.3
0
0
0.1
0.1
Accumulated
28.3
0.1
Total
Shareholders’
Equity
29.3
6
The outstanding of CB (the 2
35.3
nd
0
35.3
0
35.3
9
44.3
issuance of unsecured convertible bonds with
preemptive rights) was 15 billion yen as of March 31, 2006 and additional 6 billion
has been converted to the company common stocks up to today.
Our capital is expected to increase to approx. 10 billion yen after total conversion of
the outstanding CB.