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Yamaha to Sell Four Resort Businesses and the Shares of Their Management Companies |
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| The Board of Directors of Yamaha Corporation (Head Office: 10-1, Nakazawa-cho, Hamamatsu-shi, Shizuoka; President: Shuji Ito; Hereinafter: Yamaha) made the decision and signed a basic agreement to sell the commercial real estate of four of Yamaha’s resort and recreation businesses (Kiroro Associates Co., Ltd.; Toba Hotel International Co., Ltd.; Nemunosato Co., Ltd.; and Haimurubushi Co., Ltd.), which are described in greater detail below, and all the shares of their respective management companies to the Mitsui Fudosan Co., Ltd. The details of this transaction are as follows. |
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| 1. Reason for the Sale |
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Yamaha has resort and recreation facilities in six locations in Japan, which are managed through operating companies set up for each such facility. The profitability of the recreation business as a whole has suffered because of severe operating conditions, and Yamaha has given consideration to improving its operating performance.
Recently, Yamaha has reached basic agreement with the Mitsui Fudosan Co., Ltd., which plans to move these recreation activities into new business domains, to sell the commercial real estate of four of these facilities and the shares of the respective management companies to Mitsui, on the condition that the
employment of personnel and the businesses themselves will be continued.
Please note that the two remaining resort facilities (Katsuragi Golf Club and Tsumagoi) will continue in operation as previously. |
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| 2. Assets to Be Sold under the Transaction |
| (1) |
The commercial real estate
”Kiroro,” “Toba Hotel International,” “Nemunosato,” “Haimurubushi” |
| (2) |
The shares of their respective management companies:
Kiroro Associates Co., Ltd.
Toba Hotel International Co., Ltd.
Nemunosato Co., Ltd.
Haimurubushi Co., Ltd. |
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| 3. Selling Price |
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The total price agreed upon is ¥4.05 billion. (The breakdown is as follows: ¥2.87 billion for real estate, ¥520 million for the shares of subsidiaries, and ¥660 million for obligations of subsidiaries. Please note that the final selling price will be determined on the date of transfer and the price quoted here is provisional.)
As a result of this transfer, the parent company anticipates that it will report a profit (net income) of ¥6.7 billion as a result of extraordinary gains, tax adjustments, and other factors. However, whether this profit will be recorded in the current period or in the next and subsequent periods has not been decided. On a consolidated basis, the Company anticipates that it will report a profit (net income) of ¥6.6 billion as a result of the transfer.
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| 4. Breakdown of Real Estate to Be Sold (¥ million) |
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| Nature of assets and location |
Book value |
Selling price |
Current usage |
Recreation business assets at four facilities:
“Kiroro”
“Toba Hotel International”
“Nemunosato”
“Haimurubushi” |
Real estate |
¥ 940 |
¥ 590 |
Recreational and lodging facilities |
| Buildings and structures |
¥6,600 |
¥2,280 |
| Total |
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¥7,540 |
¥2,870 |
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The above selling price is an estimate based on information currently available. The actual selling price will be fixed on the date of the handover.
The location of these assets is as follows:
“Kiroro”: 128-1 Aza-Tokiwa, Akaigawamura, Yoichi-gun, Hokkaido;
“Toba Hotel International”: 1-23-1 Toba, Toba-shi, Mie;
“Nemunosato”: 2692-3 Hazako, Hamajima-cho, Shima-shi, Mie;
“Haimurubushi”: 2930-1 Aza-Kohama, Taketomi-cho, Yaeyama-gun, Okinawa |
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| 5. Number of Shares to Be Sold and Ownership Percentages before and after the Transfer |
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| Shares to be transferred |
Book value |
Sale price |
Kiroro Associates Co., Ltd.: 570 shares
Toba Hotel International Co., Ltd.: 114 shares
Nemunosato Co., Ltd.: 238 shares
Haimurubushi Co., Ltd.: 4,000 shares
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¥200 million |
¥520 million |
The above selling price is an estimate based on information currently available.
The actual selling price will be fixed on the date of the handover.
The Company’s ownership following the transfer will be 0 shares, representing 0% of the outstanding shares of the respective companies. |
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| 6. Outline of the Subsidiaries to Be Transferred |
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| (1)Kiroro Associates Co., Ltd. |
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| (1) |
Head office address: 128-1 Aza-Tokiwa, Akaigawamura, Yoichi-gun, Hokkaido |
| (2) |
Representative: Hiroshi Nakajima, President and Representative Director |
| (3) |
Date of establishment: October 10, 2001 |
| (4) |
Principal business: Recreation business |
| (5) |
Accounting period: March 31 |
| (6) |
Number of employees: 299 |
| (7) |
Paid-in capital: ¥380 million |
| (8) |
Number of shares issued: 570 |
| (9) |
Principal shareholder (percentage ownership): Yamaha Corporation (100%) |
| (10) |
Recent performance: Sales: ¥4,703 million (year ended March 31, 2006) |
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(2)Toba Hotel International Co., Ltd. |
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| (1) |
Head office address: 1-23-1 Toba, Toba-shi, Mie |
| (2) |
Representative: Masanobu Bessho, President and Representative Director |
| (3) |
Date of establishment: October 10, 2001 |
| (4) |
Principal business: Recreation business |
| (5) |
Accounting period: March 31 |
| (6) |
Number of employees:113 |
| (7) |
Paid-in capital: ¥50 million |
| (8) |
Number of shares issued: 114 |
| (9) |
Principal shareholder (percentage ownership): Yamaha Corporation (100.0%) |
| (10) |
Recent performance: Sales: ¥2,073 million (year ended March 31, 2006) |
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(3)Nemunosato Co., Ltd. |
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| (1) |
Head office address:2692-3 Hazako, Hamajima-cho, Shima-shi, Mie |
| (2) |
Representative: Toshiaki Koyama, President and Representative Director |
| (3) |
Date of establishment: October 10, 2001 |
| (4) |
Principal business: Recreation business |
| (5) |
Accounting period: March 31 |
| (6) |
Number of employees: 221 |
| (7) |
Paid-in capital: ¥60 million |
| (8) |
Number of shares issued: 238 |
| (9) |
Principal shareholder (percentage ownership): Yamaha Corporation (100%) |
| (10) |
Recent performance: Sales: ¥3,104 million (year ended March 31, 2006) |
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(4)Haimurubushi Co., Ltd. |
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| (1) |
Head office address: 2930-1 Aza-Kohama, Taketomi-cho, Yaeyama-gun, Okinawa |
| (2) |
Representative: Masaaki Hasegawa, President and Representative Director |
| (3) |
Date of establishment: February 23, 1996 |
| (4) |
Principal business: Recreation business |
| (5) |
Accounting period: March 31 |
| (6) |
Number of employees: 91 |
| (7) |
Paid-in capital: ¥200 million |
| (8) |
Number of shares issued: 4,000 |
| (9) |
Principal shareholder (percentage ownership): Yamaha Corporation (100%) |
| (10) |
Recent performance: Sales: ¥1,945 million (year ended March 31, 2006) |
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| 7. Outline of the Company Purchasing the Shares |
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| (1) |
Company name: Mitsui Fudosan Co., Ltd. |
| (2) |
Head office address:2-1-1, Nihonbashi-muromachi, Chuo-ku, Tokyo |
| (3) |
Representative: Hiromichi Iwasa, President and Chief Executive Officer |
| (4) |
Paid-in capital: ¥174,296 million (as of September 30, 2006) |
| (5) |
Principal shareholders:
(As of September 30, 2006)
| Principal shareholders |
Number of shares owned |
Ownership percentage (%) |
| The Master Trust Bank of Japan, Ltd. (trust account) |
70,151 |
7.96 |
| Japan Trustee Servvices Bank, Ltd. (trust account) |
60,203 |
6.83 |
| State Street Bank and Trust Company |
28,580 |
3.24 |
| The Chuo Mitsui Trust & Banking Co., Ltd. |
21,965 |
2.49 |
| State Street Bank and Trust Company 505103 |
19,095 |
2.17 |
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| (6) |
Principal business: Real estate |
| (7) |
Relationship with Yamaha: None |
Note: In some cases, the purchaser of the shares may be a member company of the Mitsui Fudosan Group, other than the parent company outlined above. |
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| 8. Schedule |
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March 23, 2007: Decision by the Board of Directors, signing of the basic agreement
May 31, 2007: Signing of the share purchase agreement (Scheduled)
July 31, 2007: Date for handover of the real estate and the shares (Scheduled) |
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| 9. Impact on Yamaha’s Performance and Outlook |
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Assuming that the transactions described here are consummated, Yamaha is scheduled to write off related asset impairment losses during the current fiscal year as extraordinary losses in the amount of ¥4,700 million and is expected to show a gain in the amount of ¥800 million as a reversal of the allowance for the evaluation of shares of subsidiaries. (¥0 million on a consolidated basis). For the next fiscal year, Yamaha will report gains from the sale of shares of subsidiaries as extraordinary gains in the amount of ¥300 million (¥1 billion on a consolidated basis).
Please note that the sale of the real estate and shares described above will result in realization of losses for tax purposes and a gain of 10.3 billion in tax adjustments. The timing for recognizing this gain (during the current period or subsequently) has not been decided.
In addition, the consummation of the transactions described here will result, in the next and subsequent fiscal years, in a decline in sales of ¥11.8 billion, an increase in recurring income of ¥1.4 billion, and an increase in net income of ¥1.1 billion in comparison with the corresponding figures for the fiscal year ended March 31, 2006. |
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For further information, please contact
Yamaha Corporation
Public Relations Division,
Public & Investor Relations Group
TEL. +81-3-5488-6601
FAX. +81-3-5488-5060
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