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Takefuji announces results of exchange offer for Takefuji Corporation JPY70,000,000,000 1.5 per cent. Convertible Bonds due 2018, finalisation of the amount and terms of Euro-yen straight bonds due 2011, and acquisition and cancellation of Takefuji Corporation JPY70,000,000,000 1.5 per cent. Convertible Bonds

As announced previously in a press release entitled "Takefuji announces exchange offer and issue of Euro-yen straight bonds due 2011" dated November 16, 2009 (the "Press Release Dated November 16, 2009") and subsequent press releases entitled "Announcement of partial changes to terms and conditions of exchange offer and issue of Euro-yen straight bonds due 2011" dated November 27, 2009 and "Takefuji announces determination of the consideration to be allocated in exchange for Takefuji Corporation JPY70,000,000,000 1.5 per cent. Convertible Bonds due 2018, together with an addition to the tender period" dated December 4, 2009 (the "Press Release Dated December 4, 2009"), TAKEFUJI CORPORATION (the "Company") has been conducting an invitation to holders (the "Holders") of Takefuji Corporation JPY70,000,000,000 1.5 per cent. Convertible Bonds due 2018 (the "Convertible Bonds") to offer to exchange their Convertible Bonds for either (i) cash only consideration or (ii) an amount of Euro-yen straight bonds due 2011 (the "New Bonds"), to be issued pursuant to resolutions passed at board meetings of the Company held on November 16, 2009 and November 27, 2009, together with a partial cash consideration (the "Exchange Offer").  The Company announces today that the tender period for the Exchange Offer has expired, that the Company will accept valid offers to exchange made pursuant to the Exchange offer, and the amount and terms of the New Bonds have been finalised as described below.

 

Further, the Company also announces that the board of directors resolved on December 9, 2009 to cancel the Convertible Bonds which the Company will acquire through the Exchange Offer in the manner described below.

The Exchange Offer is scheduled to be settled on December 14, 2009. As a result of the Exchange Offer, the amount of cash required to satisfy the holders' option to redeem Convertible Bonds exercisable in June 2010, which was previously expected to amount to as much as JPY70.0 billion, will be approximately JPY45.1 billion at the most,  and, after taking into consideration the JPY11.6 billion in cash that will be used to settle the Exchange Offer, redemption options in respect of approximately JPY13.3 billion in principal amount of Convertible Bonds  have been either reduced or rescheduled. Accordingly, the Exchange Offer, along with the cash to be raised through the contemplated sale of certain non-performing loans, will greatly improve the Company's financial soundness and stability.

Details are as follows:

1. The Exchange Offer

As announced in the Press Release Dated December 4, 2009, with respect to the Exchange Offer, the ratio of cash amounts and the principal amount of New Bonds to be delivered as consideration for exchanging a principal amount of Convertible Bonds is as follows:

 

(1) cash only consideration
Cash	65.0%
(2) partial cash consideration and New Bonds
Cash	35.0%
Principal amount of New Bonds	65.0%

Based on these terms, the aggregate principal amount of Convertible Bonds to be acquired by the Company, the aggregate amount of cash consideration and the total amount of New Bonds to be issued with respect to the Exchange Offer are as follows:

The aggregate principal amount of Convertible Bonds
to be acquired by the Company	JPY24,950 million
(i) of which, the aggregate principal amount of Convertible Bonds to be exchanged for cash only consideration	JPY9,450 million
(ii) of which, the aggregate principal amount of Convertible Bonds to be exchanged for partial cash consideration and the New Bonds	JPY15,500 million

Consideration for the Convertible Bonds:
(i) the aggregate amount of cash	JPY11,567.5 million
(ii) the aggregate amount of New Bonds to be issued	JPY10,075.0 million

In addition to the above consideration, accrued interest will be payable with respect to the Convertible Bonds. 

2. Issuance of the New Bonds

 

(1) Name of securities	Euro-yen straight bonds due 2011
(2) Denomination of the New Bonds	JPY500,000
(3) Aggregate issue amount	JPY10,075 million
(4) Issue price	100 per cent. of principal amount In lieu of payment in cash, the Convertible Bond is to be delivered at closing
(5) Closing date	December 14, 2009
(6) Coupon	10% per annum
(7) Redemption date	April 14, 2011 In each month starting July, 2010, 10% of the original principal amount of the Bonds will be redeemed until the Redemption date

3. Cancellation of the Convertible Bonds

 

Securities to be cancelled	Takefuji Corporation
	JPY70,000,000,000 1.5 per cent.
	Convertible Bonds due 2018
Date of cancellation	December 14, 2009
Amount to be cancelled	JPY24,950 million
Aggregate principal amount outstanding after the cancellation JPY45,050 million
Effect on earnings	The Company expects to post extraordinary income of approximately JPY3.3 billion for the current term.

In terms of the effect of the Exchange Offer on the Company's earnings, the Company will make a further announcement following determination of the overall impact of certain measures conducted by the Company, including the possible loss from the contemplated sale of certain non-performing loans, in addition to the extraordinary profit of approximately JPY3.3 billion to be accounted for as a result of the cancellation of the Convertible Bonds.

4. Remaining event with respect to the Exchange Offer

 

December 14, 2009	Issuance of the New Bonds and closing of the Exchange Offer
<Reference> Summary of the Convertible Bonds
(1) Date of issuance	June 19, 2008
(2) Total issue amount	JPY70bn
(3) Redemption date	June 19, 2018
(4) Coupon	1.5% per annum
(5) Conversion price	JPY 2,352 per share
(6) Early redemption option of holder	The holder has rights to redeem the Convertible Bonds on either June 19, 2010, June 19, 2013, June 19, 2016, or on the date which is five Tokyo business days prior to the effective date of certain corporate reorganisation events at 100 per cent. of its principal amount, together with accrued interest

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