RNS Number:2858P
Toshiba Corporation
02 September 2003
September 2, 2003
Tadashi Okamura, President & CEO
Toshiba Corporation
Shibaura 1-1-1, Minato-ku, Tokyo Japan
Contact: Hideo Kitamura, General Manager
Corporate Communication Office
Tel: 81 3 3457 2096
Notice of Business Separation
This document offers notice that Toshiba Corporation (hereafter called
"Separation Company") has decided to separate its telecommunication system
business serving the private sector, as conducted by the Telecommunication
Systems Division, a division of Separation Company's Social Network &
Infrastructure Systems Company (hereinafter called "Separation Business"), one
of its in-house companies, on January 1st, 2004. The Separation Business
includes development, design, manufacture and sales of telecommunications
systems business serving the private sector, with the exception of those of
optical fiber submarine cable systems and FWA (Fixed Wireless Access). On the
same date, the Separation Business is to be succeeded by Toshiba Communication
Systems Corporation (hereafter called the "Successor Company").
1. Purpose of separation
By making the Separation Business independent and transferring it to
the Successor Company, Separation Company aims to pursue more efficient and
speedy management, as well as establishing comprehensive management through all
business processes, from product planning, development, design, manufacture,
sales and installation, to maintenance services. Therefore, this separation will
enable the Separation Business to further pursue enlarged scale and
profitability, becoming more market-oriented and able to achieve the early
launch of more cost competitive, higher quality products, based on technological
core competence in IP-based visual communications networks, radio communications
and voice switching know-how.
2. Outline of the Separation
(1) Schedule
September 2, 2003 Approval of signing of separation agreement
September 8, 2003 Signature of separation agreement:
January 1, 2004 Date of separation (plan)
January 5, 2004 Registration of Corporate Separation (Plan)
(2) Method of separation
1) Method of separation
Corporate Separation ("Kaisha-Bunkatsu" under the term of the Japanese
Commercial Code) is applied. Separation Company separates the Separation
Business and transfers it to the Successor Company, in accordance with the
process for Corporate Separation admitted under the Japanese Commercial Code.
Separation Company follows "Simplified Corporate Separation" method, which does
not necessitate any resolution at the shareholders' meeting.
2) Reason for selecting this method
This method was chosen to transfer the relevant businesses efficiently.
(3) Allocation of shares
-Share allocation rate
Successor Company will allocate 200 shares to the Separation Company.
-Successor Company is a wholly owned subsidiary of the Separation Company and
this separation method is of the type in which shares are issued by the
Successor Company following the Corporate Separation, and allocated to the
Separation Company. The allocation was agreed by the parties concerned in light
of the assets and liabilities to which Successor Company will succeed, and its
corporate value.
(4) Cash subsidy
There will be no cash distribution.
(5) Legal rights and obligation to be succeeded (Plan)
All assets, liabilities, rights and obligations relating to the Separation
Business as of the date of separation, except assets specified and agreed by the
parties, will be transferred.
(6) Forecast of fulfillment of obligation
Separation Company and Successor Company will be able to meet all their
obligations.
(7) Newly appointed directors and corporate auditors of Successor Company
None.
3. Outline of the relevant companies
As of March 31, 2003 for Separation Company
As of December 31, 2003 for Successor Company (forecast)
Company name Toshiba Toshiba Communication Systems
Corporation
(Separation Company) (Successor Company)
Business Development, manufacturing, sales, Design, manufacture, installation and
and service of digital products, sales of telecommunication system
electronic devices and components, products
social infrastructure equipment and
systems, home appliances, and other
products.
Established June 25, 1904 February 20, 1987
Head Office Location Shibaura 1-1-1, Minato-ku, Tokyo Asahigaoka, 3-1-1, Hino City,
Tokyo
Representative Tadashi Okamura, Shinichi Inoue,
President and CEO President and CEO
Capital 274,926 million yen 1,000 million yen
Number of outstanding shares 3,219,027,165 30,000
Shareholders equity 708,583 million yen 44 million yen
Total Assets 2,877,805 million yen 6,900 million yen
Financial closing March 31 March 31
date
Number of employee 39,875 400
Major sales Government, Toshiba Corporation,
Local Government Power companies,
Corporations Telecommunications carriers
Consumers Railway companies
Manufacturing companies,
Distribution companies and other
companies
Principal shareholders and The Master Trust Bank of Japan Toshiba Corporation
shareholding 5.32% 100%
The Dai-ichi Mutual Life Insurance
Company 3.63%
Japan Trustee Service Bank, Ltd.
3.61%
Major banks Sumitomo Mitsui Banking Corporation Sumitomo Mitsui Banking Corporation
UFJ Bank
Mizuho Corporate Bank, etc
Relations Capital Separation Company owns all of the shares of Successor
Company.
Human Resources Employees in the Separation Business in the Separation
Company will be, in principle, dispatched to the
Successor Company on the date of separation as
management or seconded employees.
Business Separation Company and Successor Company have mutual
transaction.
Recent three-year business results Unit: Million yen
Toshiba (Separation Company) Toshiba Communication Systems Corporation
(Successor Company)
Financial closing date March 2001 March 2002 March 2003 March 2001 March 2002 March 2003
Sales 3,678,977 3,196,896 3,408,251 12,098 8,562 20,854
Operating Income (loss) 125,880 -196,752 35,188 181 -32 -511
Recurring Income (loss) 95,327 -231,816 43,378 182 -32 -530
Net Income (loss) 26,411 -260,332 83,364 89 16 -312
Net Income (loss) per 8.20 -80.87 25.90 44,632.11 8,244.32 -78,048.93
share
Annual dividend per share 10.00 0.00 3.00 18,000 3,500 0.00
(yen)
Shareholders equity (yen) 286.42 198.58 220.14 329,543.65 310,669.98 145,496.18
Note: As Successor Company was integrated and merged on July 1, 2002, business
results for fiscal year ending March 2001 and March 2002 are not based on the
current business.
4. Business to be separated
(1) Business to be separated
The Separation Business includes manufacture and sales of system integration
business and its supporting equipment in telecommunications systems for
telecommunications carriers and power companies and other private sector
companies offering broadband network solutions integrating visual and voice data
information.
(2) Business results, March 2003
unit: million yen
Separation Business (a) Toshiba (b) rate (a/b)
Sales 8,963 3,408,251 0.26%
(3) Assets and liabilities of business to be separated (Forecast to December 31, 2003)
unit: million yen
Assets Liabilities
Item Book Value Item Book Value
Current Assets 2,712 Current Liability 2,316
Property, Plant 1,113 Long-term 1,499
and Equipment Liability
Total 3,825 Total 3,815
5. Effects of business separation on Separation Company's financial results
(1) There will be no change in trade name, principal lines of business,
principal office, representative, capital stock, total assets, and financial
closing date.
(2) No significant effect on Separation Company's consolidated operating
results or financial position is forecast.
Forward looking statement:
This notice contains forward-looking statements concerning Toshiba's future
plans, strategies and performance. These forward-looking statements are not
historical facts, rather they represent assumptions and beliefs based on
economic, financial and competitive data currently available. Furthermore, they
are subject to a number of risks and uncertainties that, without limitation,
relate to economic conditions, worldwide mega-competition in the electronics
business, customer demand, foreign currency exchange rates, tax rules,
regulations and other factors. Toshiba therefore wishes to caution that actual
results may differ materially from our expectations.
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The company news service from the London Stock Exchange
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