News Article
Showa Denko to split and transfer GaN LED business
In the transfer of its gallium nitride LED business to TS Opto, SDK will transfer 70 percent of common shares in TS Opto to Toyoda Gosei. This will, make TS Opto a joint venture between the two companies and help accelerate LED development
Showa Denko K.K. (SDK) has decided to split and transfer its GaN LED epitaxial wafer/chip business to its wholly owned subsidiary TS Opto Co., Ltd. (TS Opto).
SDK and TS Opto have concluded an absorption-type company split agreement.
Since this is a case of "simplified absorption-type company split" involving SDK and its wholly owned subsidiary, part of the details are omitted from the scope of disclosure.
The use of GaN LEDs, including LCD TV/PC backlight and illumination, means their demand is expected to grow in the coming years. As the market requires more energy-saving and lower-cost product, it is necessary for GaN LED manufacturers to improve LED brightness and production efficiency while expanding supply capacity.
SDK had already reached a basic agreement with Toyoda Gosei Co., Ltd., to establish a joint venture in order to strengthen the business. This time, SDK has decided to transfer its GaN LED business to TS Opto effective December 1st, 2012 through an absorption-type company split. SDK will transfer 70 percent of common shares in TS Opto to Toyoda Gosei on the same date. This will make TS Opto a joint venture between SDK and Toyoda Gosei. The absorption-type company split is a measure to achieve the afore-mentioned goal.
TS Opto will deliver 19,400 common shares to SDK at the time of the absorption-type company split.
While SDK has issued Euro-Yen convertible bonds with warrants (with a subordination clause) due 2014, this transaction will have no influence on share options and bonds with share options, for SDK.
Following the split, there will be no increase or decrease in the amount of SDK's capital stock.
With regard to the rights and obligations pertaining to SDK's GaN LED business, TS Opto will succeed to rights and obligations as defined in the absorption-type company split agreement.
As for the liabilities TS Opto will assume following the absorption-type company split, SDK believes that there will be no problem with regard to their discharge.
SDK and TS Opto have concluded an absorption-type company split agreement.
Since this is a case of "simplified absorption-type company split" involving SDK and its wholly owned subsidiary, part of the details are omitted from the scope of disclosure.
The use of GaN LEDs, including LCD TV/PC backlight and illumination, means their demand is expected to grow in the coming years. As the market requires more energy-saving and lower-cost product, it is necessary for GaN LED manufacturers to improve LED brightness and production efficiency while expanding supply capacity.
SDK had already reached a basic agreement with Toyoda Gosei Co., Ltd., to establish a joint venture in order to strengthen the business. This time, SDK has decided to transfer its GaN LED business to TS Opto effective December 1st, 2012 through an absorption-type company split. SDK will transfer 70 percent of common shares in TS Opto to Toyoda Gosei on the same date. This will make TS Opto a joint venture between SDK and Toyoda Gosei. The absorption-type company split is a measure to achieve the afore-mentioned goal.
TS Opto will deliver 19,400 common shares to SDK at the time of the absorption-type company split.
While SDK has issued Euro-Yen convertible bonds with warrants (with a subordination clause) due 2014, this transaction will have no influence on share options and bonds with share options, for SDK.
Following the split, there will be no increase or decrease in the amount of SDK's capital stock.
With regard to the rights and obligations pertaining to SDK's GaN LED business, TS Opto will succeed to rights and obligations as defined in the absorption-type company split agreement.
As for the liabilities TS Opto will assume following the absorption-type company split, SDK believes that there will be no problem with regard to their discharge.
