Tokyo, Japan, May 24, 2011 – NSK Ltd. (NSK; Headquarters: Tokyo, Japan; President and CEO: Norio Otsuka) announced that its Board of Directors resolved at a meeting held today to spin off the Systemized Products Business Department to form a new company, NSK Technology Co., Ltd. NSK will employ a simplified method for spinning off the department and newly establishing the independent company. Accordingly, some items and information normally required for disclosure have been omitted since this corporate spin-off transaction is a simple spin-off to create a wholly owned subsidiary.
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Press Release
May 24, 2011
NSK Ltd.
CSR Division Headquarters
Public Relations Department
NSK Demerges Systemized Products Business to Form New Company
1. Purpose of the spin-off
NSK's Systemized Products Business Department operates in the market for exposure equipment used to produce flat-panel displays (FPDs). In this market, larger thin-screen televisions are being produced and image quality is rapidly improving with the introduction of high-definition television and 3D television. Meanwhile, with the surging demand for computers and high-performance mobile devices such as smart phones, FPDs are expected to deliver higher image quality in smaller sizes with high-functionality. Consequently, demand for devices equipped with FPDs is repeatedly fluctuating at extreme levels as products and technologies become obsolete with the rapid evolution of new models, and investment in new products is undertaken over the short term.
Taking into account this market environment, NSK determined that the spin-off of this department to form an independent company would speed up decision-making, improve management efficiency, enhance earnings capacity, and ensure better response to diverse market needs and fluctuations in demand.
2. Overview of the spin-off
- (1)Timetable
- Approval of plans to establish the new company by NSK's Board of Directors: May 24, 2011 Effective date of the spin-off: July 1, 2011. (scheduled)
Note: In accordance with Article 805 of Japan's Companies Act, the plan to spin off the department to form a new company does not require approval at the Company's annual general meeting of shareholders because the assets and funds for the new company do not exceed 20% of the total value of NSK's assets. - (2)Method of the spin-off
- NSK will employ a simplified method for spinning off its Systemized Products Business Department to form a new company, which will be called NSK Technology Co., Ltd.
- (3)Allotment of shares in relation to the spin-off
- The new company will issue 4,000 ordinary shares at the time it is spun off from NSK. All of the shares will be allotted to NSK, making the new company a wholly owned subsidiary.
- (4)Subsidies for the spin-off
- No subsidies will be paid out in relation to the spin-off.
- (5)Reduction in capital stock
- NSK will not reduce its capital stock at the time of the spin-off.
- (6)Transactions related to share subscription rights and corporate bonds with subscription rights
- NSK will not change how it handles the share subscription rights that it issues as a result of the spin-off forming the new company. Furthermore, NSK has no plans to issue corporate bonds with subscription rights.
- (7)Rights and obligations transferred to the new company
- The new company will acquire the rights and obligations associated with the assets, liabilities, contracts, and other matters held by NSK's Systemized Products Business Department, within the scope of the planned spin-off, as determined by NSK. Methods for underwriting multiple liabilities will be employed for liabilities transferred to the new company.
- (8)Outlook for the discharge of liabilities
- In relation to the spin-off, NSK has concluded with certainty that no problems should arise in the discharge of all liabilities held by NSK and the new company.
3. Overview of NSK and the new company
| Item | NSK (Information is as of March 31, 2011) | New company (Information is projected as of July 1, 2011) | ||
|---|---|---|---|---|
| 1) Company name | NSK Ltd. | NSK Technology Co., Ltd. | ||
| 2) Description of business | Manufacture and sale of industry machinery bearings, automotive products, precision machinery and parts, and other products | Manufacture and sale of exposure equipment used to produce FPDs | ||
| 3) Date of establishment | November 8, 1916 | Scheduled for July 1, 2011 | ||
| 4) Head office address | 1-6-3 Ohsaki, Shinagawa-ku, Tokyo | 1-6-3 Ohsaki, Shinagawa-ku, Tokyo | ||
| 5) Representative director | Norio Otsuka President and CEO |
Akira Tamaki, president and representative director | ||
| 6) Capital | 67,176 million yen | 200 million yen | ||
| 7) Number of shares issued and outstanding | 551,268,104 shares | 4,000 shares | ||
| 8) Net assets | 275,269 million yen (consolidated) | 492 million yen | ||
| 9) Total assets | 788,626 million yen (consolidated) | 2,637 million yen | ||
| 10) Fiscal year-end | March 31 | March 31 | ||
| 11) Major shareholders and ownership | The Master Trust Bank of Japan, Ltd. (Trust Account) |
7.05% | NSK Ltd. | 100% |
| Fukoku Mutual Life Insurance Company | 5.80% | |||
| Nippon Life Insurance Company | 5.54% | |||
| Meiji Yasuda Life Insurance Company | 4.84% | |||
| Japan Trustee Services Bank, Ltd. (Trust Account) | 4.42% | |||
4. NSK's consolidated financial results for the three most recent fiscal years
(Millions of yen; yen for per share figures)
| NSK Ltd. | |||
|---|---|---|---|
| Fiscal year | Fiscal year ended March 31, 2009 |
Fiscal year ended March 31, 2010 |
Fiscal year ended March 31, 2011 |
| Net sales | 647,593 | 587,572 | 710,431 |
| Operating income | 22,106 | 11,305 | 43,524 |
| Ordinary income | 16,964 | 7,598 | 38,572 |
| Net income | 4,561 | 4,765 | 26,110 |
| Net income per share | 8.44 | 8.82 | 48.30 |
| Dividend per share | 14.00 | 8.00 | 11.00 |
| Net assets per share | 431.74 | 458.65 | 475.45 |
5. Overview of the business to be spun off
- (1) Business operations to be spun off
- Manufacture and sale of exposure equipment used to produce FPDs.
- (2) Scale of business to be spun off relative to NSK's net sales in the fiscal year ended March 31, 2011
-
Item Unconsolidated results of NSK Ltd. Systemized products business (a) Company total (b) Ratio of a / b Net sales 11,525 million yen 488,639 million yen 2.3%
6. Status of NSK after the spin-off
There will be no change to NSK's company name, head office location, representative, capitalization or fiscal year as a result of the corporate spin-off.
7. Future prospects
NSK does not expect any significant effects on its consolidated financial performance from the spin-off to form an independent company.