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Prospect Co. Announcement Notice of Change in the Company's Consolidated Subsidiary (Share Transfer) and Acquisition of Silent Partnership Equity

Nachrichtenquelle: PR Newswire (engl.)
26.03.2019, 12:54  |  312   |   |   

ST. PETER PORT, Guernsey, March 26, 2019 /PRNewswire/ -- Prospect Co., Ltd. (hereinafter referred to as the "Company") and its consolidated subsidiary, Kidoh Construction Industry Co., Ltd. (hereinafter referred to as "Kidoh Construction"), on approval of both companies' Board of Director's Meetings held today, have decided that all of the shares of Kidoh Construction owned by the Company will be sold to Kidoh Global Holdings Co. Ltd (hereinafter referred to as "KGH") and that the Company is to acquire an equity interest in a silent partnership related to the Narita Kozaki Solar Project owned by Kidoh Construction.

Note

1. Reasons for the Share Transfer

As of March 20, 2014, the Company acquired all issued shares of Kidoh Construction and made the company a subsidiary. Kidoh Construction is a leading company in the underground pipe jacking (underground microtunneling work such as water and sewage, gas, subway, utility tunneling, etc.), and in addition to the prestressed concrete (PC) work, it has made significant contributions to increasing the corporate value of our group by way of synergy effects in our solar business, such as contracting cable laying work for public roads covering approximately 5 km at power stations.

At this time, a management buyout (MBO) has been offered by KGH, which was established by Mr. Masaaki Nakano, President and Representative Director of Kidoh Construction (hereinafter referred to as Mr. Nakano), and Mr. Noriyasu Uehara (hereinafter referred to as Mr. Uehara), Executive Vice President, to purchase all of the Kidoh Construction stock held by the Company.

The intent of Kidoh Construction officers is to return Kidoh Construction as quickly as possible to a family-like corporate culture as it was at the time of its founding, without the need for external capital, and a system where it is possible to make quick decisions independently.  With the environment in place, including the necessary funding for the MBO, Kidoh Construction has made offer for the Share Transfer for the purpose of independence.

In the approximately five years since becoming a subsidiary of the Company, Kidoh Construction has been steadily improving its earning power, however in the future it will have amplified motivation for further development and corporate value growth. In addition, as for the Company, we anticipate the opportunity to further future development by reinvesting the proceeds from the Share Transfer.

In conjunction with the Share Transfer, the Company plans to acquire an additional 25% stake in the silent partnership investment for the Narita Kozaki Solar Project currently owned by Kidoh Construction. The Company currently holds 55% of the silent partnership equity interest, and after the additional acquisition, the Company will have an 80% interest.

2. Overview of consolidated subsidiary to be changed

1.

Company Name

Kidoh Construction Industry Co., Ltd.

2.

Location

Osaka Prefecture, Osaka City, Fukushima Ward Fukushima 4-6-31

3.

Title and Name of Corporate Head

President and CEO Masaaki Nakano

4.

Business Description

Underground pipe jacking construction such as water and sewage, underground passage, common duct, large box culvert, shield construction, PC (Prestressed Concrete) bridge and PC tank construction

Others, general civil engineering construction work

5.

Capitalization

JPY 83,303,500

6.

Established

October 29, 1946

7.

Major shareholders and shareholding ratio

Prospect Co., Ltd 94.95%

8.

Relationship between listed company and relevant company

Capital ties※

The Company holds 94.95% of Kidoh Construction's stock.

Personnel ties

One executive officer of the Company concurrently serves as a part-time director of Kidoh Construction.

Business relationship

Kidoh Construction is engaged in civil engineering work for projects promoted by the Company.

Status of related parties

Kidoh Construction falls under the Company's consolidated subsidiary.

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