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Formal Decision Taken on Absorption-type Split of MHI's Engine Test Cell and Hush House Business to Consolidated Subsidiary
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Tokyo, December 6, 2016 - As announced on October 18, 2016, effective April 1, 2017 Mitsubishi Heavy Industries, Ltd. (MHI) is planning to transfer its business operations in engine test cells and hush houses to Mitsubishi Heavy Industries Mechatronics Systems, Ltd. (MHI-MS), a wholly owned Group company, through an absorption-type company split arrangement. Today, a formal decision was taken on concluding the absorption-type split agreement with MHI-MS as described below. Because the split involves a business transfer to a consolidated subsidiary, some disclosure details and contents have been omitted.
1. Aims of the Company Split
The decision to transfer MHI's engine test cell and hush house business operations to MHI-MS was taken in view of the close technological affinity of those products with the testing equipment and other machinery systems manufactured by MHI-MS. By transferring the relevant operations to MHI-MS, benefits are expected in terms of more effective use of human resources and expansion of related business.
2. Overview of the Company Split
(1) Schedule
| Contract signing | December 6, 2016 |
|---|---|
| Effective date | April 1, 2017 (subject to change) |
* As the company split will be a simple absorption-type split pursuant to Article 784, Paragraph 2 of the Companies Act of Japan, approval at a general shareholders meeting as stipulated in Article 783, Paragraph 1 of that Act is not required.
(2) Company Split Method
This will be a simple absorption-type split, with MHI as the splitting company and MHI-MS as the successor company.
(3) Allocation Relating to Company Split
Coinciding with the company split, MHI-MS will issue 1,000 shares of common stock to be allocated in full to MHI.
(4) Handling of Stock Acquisition Rights and Bonds with Stock Acquisition Rights Accompanying the Company Split
Obligations based on the stock acquisition rights of MHI, the splitting company, will neither be transferred to nor succeeded to by MHI-MS, the successor company. MHI has not issued any bonds with stock acquisition rights.
(5) Changes in Capital Amount Accompanying the Company Split
The company split will result in no decrease either in MHI's capital or in its capital reserve.
(6) Rights and Obligations Transferred to the Successor Company
- 1)The successor company will succeed to the intellectual properties and related assets, rights and obligations pertaining to the engine test cell and hush house business of the splitting company (with the exception of anything stipulated as exempt in the split agreement).
- 2)Any and all liabilities or other obligations of the splitting company which the successor company succeeds to shall be succeeded cumulatively.
(7) Outlook on Performance of Obligations
Any obligations which the splitting company and the successor company should bear as a result of the company split will be duly met.
3. Outline of the Companies Involved in the Company Split
| Splitting Company (as of March 31, 2016) | Successor Company (as of March 31, 2016) | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (1) Name | Mitsubishi Heavy Industries, Ltd. (MHI) | Mitsubishi Heavy Industries Mechatronics Systems, Ltd.(MHI-MS) | ||||||||||
| (2) Head Office | 16-5, Konan 2-chome, Minato-ku, Tokyo | 4-22, Wadamiya-dori 5-chome, Hyogo-ku, Kobe, Japan | ||||||||||
| (3) Representative | Shunichi Miyanaga President and CEO | Tadashi Nagashima President | ||||||||||
| (4) Business | Manufacture, etc. of ships, marine engines, power systems, machinery, steel structures, aircraft, aerospace systems, industrial machinery, special vehicles, etc. | Design, manufacture, installation, marketing, repair, modification and maintenance of the following products: * Intelligent transportation systems (ITS): toll collection systems, electronic toll collection systems, other ITS-related equipment * Hydraulic machinery: hydraulic components, deck machinery, deck cranes, air-heaters, other hydraulic and mechanical equipment * Machinery systems: testing equipment, inspection systems, culture and sports facilities, space equipment, thermal plants, systemcontrollers, electronic control equipment, particle accelerators, penstocks, other industrial and general-purpose mechanical equipment * Mechanical parking systems: mechanical parking facilities, other transfer systems * Steel structure plants: industrial chimneys, seismic isolation and vibration control systems, gas holders, steel structures (including steel pipe), other steel structure products, road infrastructure maintenance machinery and equipment (bridge inspection vehicles, tunnel sprinkler spray performance measurement vehicles, etc.) * Food processing and packaging machinery: food processing machines, food packaging machines, peripheral components and plant systems | ||||||||||
| (5) Capital | 265,608 million yen | 1,060 million yen | ||||||||||
| (6) Establishment | January 11, 1950 | December 2, 1968 | ||||||||||
| (7) Number of issued shares | 3,373,647,813 | 201,000 | ||||||||||
| (8) Fiscal year end | March 31 | March 31 | ||||||||||
| (9) Major shareholders and shareholdings |
| Mitsubishi Heavy Industries, Ltd. 100% | ||||||||||
| (10) Fiscal Status and Earnings Results during the Most Recently Completed Fiscal Year | ||||||||||||
| Splitting company (consolidated) | Successor company (non-consolidated) | |||||||||||
| Net assets | 1,998,078 million yen | 39,904 million yen | ||||||||||
| Total assets | 5,491,799 million yen | 78,090 million yen | ||||||||||
| Net assets per share | 500.30 yen | 198,527.60 yen | ||||||||||
| Revenues | 4,046,810 million yen | 75,319 million yen | ||||||||||
| Operating income | 309,506 million yen | 8,673 million yen | ||||||||||
| Ordinary income | 272,500 million yen | 8,423 million yen | ||||||||||
| Net income | 63,834 million yen | 8,067 million yen | ||||||||||
| Net income per share | 19.02 yen | 40,137.69 yen | ||||||||||
(11) Description of Business being Split or Succeeded to
Design, manufacture, construction, marketing and after-sale servicing of engine test cells and hush houses (including business auxiliary to the foregoing)
(12) Earnings of Business being Split or Succeeded to
| Business being split (a) | MHI total (consolidated) in FY ended March 2016 (b) | Percentage (a/b) | |
|---|---|---|---|
| Revenues | 648 million yen | 4,046,810 million yen | 0.016% |
(13) Assets and Liabilities of Business being Split or Succeeded to
| Assets | 2.4 million yen |
|---|---|
| Liabilities | 0.7 million yen |
4. Status of Splitting Company after Split
| (1) Name | Mitsubishi Heavy Industries, Ltd. |
|---|---|
| (2) Head Office | 16-5, Konan 2-chome, Minato-ku, Tokyo |
| (3) Representative | Shunichi Miyanaga, President and CEO |
| (4) Business | Manufacture, etc. of ships, marine engines, power systems, machinery, steel structures, aircraft, aerospace systems, industrial machinery, special vehicles, etc. |
| (5) Capital | 265,608 million yen |
| (6) Fiscal year end | March 31 |
5. Status of Successor Company after Split
| (1) Name | Mitsubishi Heavy Industries Mechatronics Systems, Ltd. |
|---|---|
| (2) Head Office | 4-22, Wadamiya-dori 5-chome, Hyogo-ku, Kobe, Japan |
| (3) Representative | Tadashi Nagashima, President |
| (4) Business | Design, manufacture, installation, marketing, repair, modification and maintenance of the following products: * Intelligent transportation systems (ITS): toll collection systems, electronic toll collection systems, other ITS-related equipment * Hydraulic machinery: hydraulic components, deck machinery, deck cranes, air-heaters, other hydraulic and mechanical equipment * Machinery systems: testing equipment, inspection systems, culture and sports facilities, space equipment, thermal plants, system controllers, electronic control equipment, particle accelerators, penstocks, other industrial and general-purpose mechanical equipment * Mechanical parking systems: mechanical parking facilities, other transfer systems * Steel structure plants: industrial chimneys, seismic isolation and vibration control systems, gas holders, steel structures (including steel pipe), other steel structure products, road infrastructure maintenance machinery and equipment (bridge inspection vehicles, tunnel sprinkler spray performance measurement vehicles, etc.) * Food processing and packaging machinery: food processing machines, food packaging machines, peripheral components and plant systems |
| (5) Capital | 1,060 million yen |
| (6) Fiscal year end | March 31 |
6. Outlook
Impact from the company split on MHI's earnings will be minimal, on both a consolidated and non-consolidated basis.
About MHI Group
Mitsubishi Heavy Industries (MHI) Group is one of the world’s leading industrial groups, spanning energy, smart infrastructure, industrial machinery, aerospace and defense. MHI Group combines cutting-edge technology with deep experience to deliver innovative, integrated solutions that help to realize a carbon neutral world, improve the quality of life and ensure a safer world. For more information, please visit www.mhi.com or follow our insights and stories on spectra.mhi.com.