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February 19, 2007 |
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Mitsubishi Rayon Co., Ltd. |
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Marketing of Acrylic Filaments and Synthetic
Leather to be Handled by Subsidiary
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Mitsubishi Rayon Co., Ltd.(MRC) has decided to transfer the responsibility for marketing its acrylic filament products and its synthetic leather products to its existing subsidiary Mitsubishi Rayon Textile Co., Ltd. (which has hitherto handled only the wholesaling of fabric) through the corporate divestiture method, with effect from April 1, 2007.
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Objectives of Transfer |
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Since 1971 the Company’s SILPALON acrylic filaments have been popular in the high-class knitted fashion world, thanks to their superior glossiness, bright colors, and silky feel. In addition, Mitsubishi Rayon’s synthetic suede, made from ultrafine acrylic fibers and sold under the name GLORE, has found many uses in the fields of high-class apparel and upholstery, thanks to various unique qualities possessed only by acrylic fibers, as well as the fact that it is manufactured in an eco-friendly way, without the use of any non-biodegradable organic solvents.
With the two-fold objective of enhancing the profitability of these two businesses by creating a more efficient operating framework, and strengthening the consolidated group’s textile operations, MRC has decided to transfer the responsibility for the marketing of SILPALON and GLORE (both handled up to now by the Company’s Fibers Operations Division), to Mitsubishi Rayon Textile Co., Ltd. through the corporate divestiture procedure.
The management of Mitsubishi Rayon Textile intends to take advantage of this move to leverage synergies arising between the materials it has handled up to now with SILPALON and GLORE, and to make use of the resulting stronger business portfolio to expand its business operations.
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Outline of planned corporate divestiture procedures |
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Schedule of divestiture: |
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Feb. 19, 2007 |
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Divestiture agreement to be approved at meetings of boards of directors of Mitsubishi Rayon Co., Ltd. and Mitsubishi Rayon Textile Co., Ltd. |
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April 1, 2007 |
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Date on which divestiture is to take effect |
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April 13, 2007 |
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Registration of divestiture |
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Method of divestiture: |
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Mitsubishi Rayon Co., Ltd. is to transfer to its consolidated subsidiary Mitsubishi Rayon Textile Co., Ltd. the marketing functions described above (including rights and obligations). As permitted under the provisions of Article 784, Clause 3 of the Corporation Law, the members of the Board of Directors of MRC have taken the decision to implement this divestiture without seeking the approval of the Company’s shareholders at a General Meeting of Shareholders. |
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Reasons for adopting the method of divestiture: |
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By separating the marketing operations of MRC’s acrylic filament and synthetic leather businesses from the production operations, and amalgamating the said marketing operations with the existing textile marketing operations of Mitsubishi Rayon Textile (which are focused on the apparel field and based on a strategy of differentiation from competitors’ products), it is intended that Mitsubishi Rayon Textile’s business portfolio will be strengthened by the addition of unique, high-quality materials. It is for these reasons that MRC has chosen to divest the said marketing operations to its consolidated subsidiary Mitsubishi Rayon Textile Co., Ltd. |
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Allotment of stock: |
The additional 3,000 shares that Mitsubishi Rayon Textile Co., Ltd. shall issue upon the occasion of this divestiture shall be allotted to Mitsubishi Rayon Co., Ltd.
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Amount of money to be delivered upon divestiture: |
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No payment shall be made upon divestiture. |
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Rights and obligations to be assumed by the company taking over the divested operations: |
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Mitsubishi Rayon Textile shall take over from MRC all assets, liabilities, and contractual rights & obligations as shall be deemed necessary for carrying out the operations that Mitsubishi Rayon Textile is to take over from MRC. |
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Prospects of fulfillment of existing obligations by company taking over divested operations: |
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As the company taking over the operations in question from MRC is a wholly owned subsidiary of MRC, all obligations will be fulfilled. |
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New directors to be assigned to the subsidiary: |
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No additional director or directors shall be appointed for Mitsubishi Rayon Textile Co., Ltd. on the occasion of the present divestiture. |
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Outline of Operations to be Divested |
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As of September 30, 2006
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Company scheduled to take over divested operations |
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Name: |
Mitsubishi Rayon Textile Co., Ltd. |
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Line of business: |
Wholesale of fabric |
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Date of establishment: |
October 1, 2001 |
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Address of head office: |
1-8-30 Tenmabashi, Kita-ku, Osaka |
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Representative: |
Representative Director and President, Tsukasa Ueda |
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Paid-in capital: |
¥4 million |
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Shares issued and outstanding: |
8,000 shares |
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Net assets: |
¥2,446 million |
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Total assets: |
¥11,965 million |
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Term-end: |
March 31 |
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Employees: |
68 |
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Principal business partners: |
Hironen Co., Ltd.; Toyota Tsusho Corporation |
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Major shareholders and equity stakes: |
Wholly owned by Mitsubishi Rayon Co., Ltd. |
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Main bank: |
Bank of Tokyo-Mitsubishi UFJ |
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Relationships between the two companies in question |
Capital |
The company taking over the divested operations is a wholly owned subsidiary of the divesting company |
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Personnel |
The parent company appoints directors to sit on the Board of the subsidiary, and also assigns employees on temporary transfer |
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Trading relationship |
The parent company supplies the subsidiary with acetate and polyester filaments |
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Organizational conflicts of interest |
None |
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Sales recorded by acrylic filament and synthetic leather operations for term ended March 31, 2006, compared with net sales for MRC on a non-consolidated basis
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Acrylic filaments and synthetic leather (a) |
Net sales of MRC (b) |
Percentage of net sales (a/b) |
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¥2,756 million |
¥227,916 million |
1.2% |
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Note: The above table shows a comparison of sales only. A comparison of operating income was not feasible due to the fact that a reapportionment of expenses posted under “non-allocable” is impossible. |
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Major items of assets and liabilities subject to transfer
(as of September 30, 2006)
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Assets |
Liabilities |
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Book value |
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Book value |
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Trade receivables Inventory assets Other assets |
¥1,100 million |
Bank borrowings and other debt |
¥800 million |
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For further inquiries, please contact: |
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Public and Investor Relations Office |
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