News Release: Ferrotec Holdings Corporation (6890 JASDAQ)
December 11, 2019
Notice of Capital Increase (Change in Disclosure) and Change in Name of Our Specific Subsidiary
Ferrotec Holdings Corporation has resolved today to increase the capital and change the trade name of Anhui Tomiraku Technology Development Co., Ltd. (hereinafter referred to as "FTSA"), a consolidated subsidiary that falls under the category of specific subsidiaries. Details are as follows.
1. Overview of specified subsidiaries FTSA is a core sub-subsidiary engaged in recycling and parts cleaning for semiconductor manufacturing equipment and precision component for FPD manufacturing equipment components. (1) Name Ferrotec（Anhui）Technology Co., Ltd. (abbreviated as FTSA) (2) Location No.18 Nanhai Road, Kailuan District, Jinqiao, Tongling, Anhui, China (3) Job Title/Name of He Xian Han, Representative Director Representative (4) Business Cleaning services for high-purity process tool parts for semiconductors and FPDs (5) Capital stock 110,000 thousand yuan (as of November 30, 2019) (6) Established December 26, 2017 (7) Major shareholders and Shanghai Shenhe thermo-magnetics electronics Co.,Ltd. (our consolidated subsidiary) 100% shareholding ratio (8) Relationship with listed Capital relationship Shanghai Shenhe thermo-magnetics electronics Co.,Ltd. (hereinafter “FTS”), company and the company which is 100% owned by the Company, concerned will become a wholly owned subsidiary. Personnel 2 of our directors concurrently serve as directors and auditors relationship Business None relationship (9) Operating results and financial position for the last year (in Chinese Yuan) Fiscal year end FY12/18 Net assets 50,000 (772 million yen) Total assets 103,834 (1,604 million yen) Net assets per share - (- million yen) Net sales - (- million yen) Net income (loss) attributable - to owners of parent (- million yen)
Dividends per share - (- million yen) (Note 1) Since this is the first accounting period since establishment, only the most recent fiscal year FY12/18 is presented. Furthermore, the entries for business results and dividends have been omitted because the Subsidiary was not in operation during the period. (Note 2) The yen exchange rate of 15.45 used is the intraday exchange rate per Chinese yuan as announced on December 10, 2019. (Rounded down to the nearest million yen) (Note 3) Net assets per share are omitted because the subsidiary is a limited company.
- 1 -
News Release: Ferrotec Holdings Corporation (6890 JASDAQ)
2. Details of capital increase (changes in disclosure items) and trade name changes (1) Capital increase (changes in disclosure items) The details of the capital increase announced in " Notice Regarding the Organizational Restructuring of Chinese Subsidiaries and a Change of Specific Subsidiaries " dated July 17, 2019 will be changed as follows. Before the change After the change 110,000 thousand yuan 210,000 thousand yuan Capital stock (1,699 million yen) (3,244 million yen) Thousands Thousands FTS of yuan 100% FTS of yuan 81.0% 110,000 170,000
Shanghai Zezu Thousands Enterprise Management Center of yuan 4.8% (Limited partner) 10,000 Major Shanghai Zuzhen Thousands shareholders/holding Enterprise of yuan 9.5% ratio and relationship Management Center (Limited partner) 20,000 with listed company Tongling Guxin Semiconductor Technology Stock Thousands Investment Fund Partnership of yuan 4.8% (Limited partner) 10,000 (hereinafter, Tongling Investment Fund)
(Note 4) On the basis of the evaluation (*) of the third-party evaluation organization, Kunyuan Industrial Co., Ltd., the capital amount is 1 Chinese yuan, the price is 2.0 Chinese yuan, and the amount of capital increase is 100 million Chinese yuan (100 million shares) and the paid-in capital increase is estimated to be 200 million yuan. (* The price was calculated using the discounted cash flow method (DCF method)) (Note 5) The difference between the paid-in capital increase and the capital increase of 100,000 yuan is recorded in the capital surplus. (Note 6) The Shanghai Zezu Corporate Management Center (Limited partner) and the Shanghai Zuzhen Corporate Management Center (Limited partner) are stockholding associations for FTSA officers and employees. (Note 7) The Tongling Investment Fund is an investment fund mainly invested in by the Tongling Development Investment Group Co., Ltd., which is an investment fund established under the Tongling City Government of Anhui Province, China, where FTSA is located, and Tongling City Construction Investment Holding Co., Ltd. (Note 8) The amount of capital increase, stock price, and paid-in amount may vary due to changes in the situation of FTSA and investors.
- 2 -
News Release: Ferrotec Holdings Corporation (6890 JASDAQ)
[Outline of Tongling Guxin Semiconductor Technology Stock Investment Fund Partnership](Limited partner)
(1) Company name Tongling Guxin Semiconductor Technology Stock Investment Fund Partnership (Limited partner)
(2) Investor Form of Amount of Reckoned Investor Investment ratio partnership investment shar GP Thousands of Shanghai Solid Reliance (unlimited yuan 10% Investment Holding Co., Ltd. liability) 200 LP Thousands of Tongling Development (Limited yuan 45% Investment Group Co., Ltd. Liability) 9,900 LP Thousands of Tongling Municipal Construction (Limited yuan 45% Investment Holding Co., Ltd. Liability) 9,900
(3) Business Tongling Government Fund
[Outline of Tongling Development Investment Group Co., Ltd. ] (1) Company name Tongling Development Investment Group Co., Ltd.
(2) Capital stock 1.5 billion yuan (3) Established October 30, 2008 (4) Investor Tongling State-owned Assets Supervision and Administration Commission (5) Board of 汪暉(Chairman), 銭滢, 張陽 and nine other directors Directors (6) Business Operation and management of state-owned assets within the scope of Tongling City National Asset Supervision and Management Committee Investment targets include infrastructure development, development / construction of industrial park and facility, etc. [Tongling Municipal Construction Investment Holding Co., Ltd.] (1) Company name Tongling Municipal Construction Investment Holding Co., Ltd. (2) Capital stock 7.43 billion yuan (3) Established October 20, 2008 (4) Investor Tongling State-owned Assets Supervision and Administration Commission 94.21% China Agricultural R&D Key Construction Fund Co., Ltd. 5.79% (100% owned by Agricultural Development Bank of China) (5) Board of 3: 古松 (Chairman), 張明, 呉国月 Directors (6) Business Infrastructure development, investment in basic industries, transportation and public works, financing, construction and operation, management of state- owned assets within the scope of authorization, asset management, project investment management, etc.
- 3 -
News Release: Ferrotec Holdings Corporation (6890 JASDAQ)
[Shanghai Solid Reliance Investment Holding Co., Ltd.] (1) Company name Shanghai Solid Reliance Investment Holding Co., Ltd. (2) Capital stock 30 million yuan (3) Established May 15, 2019 (4) Investor Cheng Zhizhong (5) Board of Cheng Zhizhong (Executive Director) and Yang Can (Supervisor) Directors (6) Business Asset management, investment management, investment advisory, business management advisory, financial consulting and investment
(2) Company name change
The company name of FTSA will be changed in accordance with the reorganization from the private limited company to the public limited company in the Chinese Companies Act. Before the change After the change Company name Ferrotec（Anhui）Technology Co., Ltd. Ferrotec（Anhui）Technology and Development Co., Ltd. (Note 9) The use and registration of the company name subsequent to this transaction is conditional upon the approval of the governmental regulatory authority (the Commerce and Industry Bureau).
3. Reason for capital increase and trade name change The precision parts recycling and cleaning market in China is expected to expand over the medium-to-long term. FTSA is in a leading position in the precision parts recycling and cleaning market in China, but with the aim of achieving further growth in the business, and is carrying out capital increases and implementing organizational changes. Specifically, the company plans to change the FTSA company form from the current private limited company to public limited company ('Kabushiki gaisha' in Japan) to enable the expansion of its organizational structure.
It is intended to undertake capital increases by the stockholding associations for FTSA officers and employees, as well as raising capital by susbscription, and to clarify officers' management responsibilities by raising their own consciousness of management participation and belonging, and awareness of improving business performance. Undertaking the capital increase by the Yangling Investment Fund will deepen the cooperative relationship with Tongling City by receiving capital increase from an investment fund mainly invested in by the Tongling Development Investment Group Co., Ltd., where FTSA is located along with a further enhancement of capital intended to strengthen its corporate base in China.
4. Date of change: December 2019 (planned)
5. Details of organizational restructuring (changes in disclosures) As announced in the "Notice Regarding the Organizational Restructuring of Chinese Subsidiaries and a Change of Specific Subsidiaries" dated July 17, 2019, the organization restructuring (excluding FTSA) of the second-tier subsidiary company related to the holding company of our precision parts recycling and cleaning business invested in by FTS has been changed as follows. The change in the amount is due to the changes in the calculation base for net assets from the end of June 2019 to the end of August 2019. Furthermore, in accordance with the advice received from a local audit corporation, the investment consideration has been changed from investment interest to cash.
- 4 -
News Release: Ferrotec Holdings Corporation (6890 JASDAQ)
Consideration Amount of Major Company name Abbreviation Address Capital for contribution in Businesses investment kind Ferrotec (Dalian) FTSD China Thousands of Precision Cash Thousands of Technology Dalian yuan parts 100% yuan Co.,Ltd. City 20,000 recycling/ 26,283 Cleaning Ferrotec (Tianjin) FTST China Thousands of Precision Cash Thousands of Technology Tianjin yuan parts 100% yuan Co.,Ltd City 20,000 recycling/ 31,365 Cleaning Ferrotec FTSS China Thousands of Precision Cash Thousands of (Sichuan) Sichuan yuan parts 100% yuan Technology Province 70,000 recycling/ 102,687 Co.,Ltd Cleaning Ferrotec FTSC China Thousands of Recycling Cash Thousands of (Shanghai) Shanghai yuan and 100% yuan Intelligence & City 30,000 cleaning/ 30,000 Technology Co., Inspection Ltd. Total Thousands of yuan 190,335 (2,940 million yen) (Note 10) The yen exchange rate is 15.45 yen as of December 10, 2,019, the approximate exchange rate announced on the yuan. (Rounded down to the nearest million yen)
6. Future outlook We expect the impact on our consolidated financial results for the fiscal year ending March 2020 to be minimal, but we will promptly announce any matters to be disclosed in the future.
- 5 -