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Press Release

Announcement on Reorganization (Corporate Split)
of ALA Business of Cosmo Group

August 4, 2015
Cosmo Oil Co., Ltd.
Corporate Communications Dept.
Public Relations Office

COSMO OIL CO., LTD. (“COSMO”) has resolved, at its Board of Directors' meeting held on August 4, 2015, to transfer its 5-Aminolevulinic Acid (“ALA”) Business to its wholly-owned subsidiary COSMO ALA CO., LTD. (“COSMO ALA”) by way of an absorption type corporate split.
This is an absorption type corporate split involving a wholly owned subsidiary, and the summary of the transaction are as follows.

1. Purpose of the Corporate Split

Cosmo Energy Holdings Co., Ltd. will be established on October 1, 2015 as a Holding Company (wholly-owning parent company), provided all regulatory approvals are obtained. The decision was resolved at the Board of Directors meeting held on May 12, 2015, and the general shareholders meeting held on June 23, 2015. Accordingly, COSMO will transfer its ALA business to COSMO ALA to attain faster judgement and higher efficiency on ALA business.

2. Outline of the Share Transfer

(1) Schedule of the Share Transfer

Board resolution (COSMO and COSMO ALA)
August 4, 2015
Conclusion of agreement
August 4, 2015
Effective date of corporate split
October 1, 2015 (planned)

(NOTE)
The above schedule may be subject to change if necessary.
Since this company split constitutes a simple absorption-type company split as stipulated in Article 784, Paragraph 2 of the Companies Act, obtaining approval at COSMO’s general meeting of shareholders is not required.

(2) Corporate split method

This corporate split is an absorption type corporate split in which COSMO will be the Splitting Company, and COSMO ALA will be the Succeeding Company.

(3) Details of allotments relating to the corporate split

There will be no consideration such as allotment of shares or payment of cash due to this corporate split.

(4) Treatment of stock acquisition rights and corporate bonds with stock acquisition rights following this corporate split

Neither COSMO nor COSMO ALA have issued any stock acquisition rights or corporate bonds with stock acquisition rights.

(5) Paid-in capital increase or reduction due to this corporate split

There will be no change in paid-in capital due to this corporate split.

(6) Rights and obligations to be succeeded to by the Succeeding Company

COSMO ALA will succeed the entire ALA business of COSMO as of the effective date, including its assets, liabilities, contractual positions, rights and obligations relating thereto. In respect of succession to the obligations, it will be carried out by an assumption of obligations without exempting COSMO therefrom.

(7) Expectations Regarding Fulfillment of Obligations

There are no concerns regarding fulfilment of both COSMO and COSMO ALA of obligations upon completion of the company split.

3. Outline of the Business to Be Transferred

ALA business of COSMO

(1) Details of the business to be transferred

  • Distribution of ALA
  • Development of hair growth products and soil fertilizers containing ALA

(2) Operating results of the business

Net sales \1,016 million (Year ended March 31, 2015)

(3) Items and Book Value of Assets to Be Transferred (As of March 31, 2015)

Assets Liabilities
Items Book Value Items Book Value
Current Assets \728 million Current Liabilities \4 million
Fixed Assets \112 million Fixed Liabilities \0
Total \840 million Total \4 million

4. Outline of the Companies Involved in the Corporate Split
Splitting Company (As of March 31, 2015)

(1) Company Name COSMO OIL CO., LTD.
(2) Head Office 1-1-1, Shibaura, Minato-ku, Tokyo, Japan
(3) Name and Title of the Representative Keizo Morikawa, President, Representative Director, Chief Executive Officer
(4) Primary Business Integrated Oil Business
(5) Paid-in Capital \107,246,816,126
(6) Date of Establishment April 1, 1986
(7) Number of Issued Shares 847,705,087
(8) Accounting Period March 31
(9) Major Shareholders and Shareholding Ratio

20.76%

Infinity Alliance Limited

4.59%

Royal Bank of Canada Trust Company (Cayman) Limited

4.43%

Japan Trustee Services Bank, Ltd.

3.71%

Mizuho Bank, Ltd.

2.32%

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

2.19%

The Kansai Electric Power Co., Inc.

2.08%

Mitsui Sumitomo Insurance Co., Ltd.

1.86%

Aioi Nissay Dowa Insurance Co., Ltd.

1.86%

Sompo Japan Nipponkoa Insurance Inc.

1.76%

Cosmo Oil Customers Shareholding Association
(10) Operational Results and Financial Conditions for the Most Recent Years (Apr.-Mar.2015)
Net Assets \207,520 million
Total Assets \1,428,628 million
Net Assets per Share \197.39
Net Sales \3,035,818 million
Consolidated Operating Income \- 38,447 million
Consolidated Ordinary Income \- 49,640 million
Consolidated Net Income \- 77,729 million
Consolidated Net Income per Share \- 91.77

Succeeding Company (As of March 31, 2015)

(1) Company Name COSMO ALA CO., LTD.
(2) Registered Office 1-1-1, Shibaura, Minato-ku, Tokyo, Japan
(3) Name and Title of the Representative Akihiro Muranaka , Representative Director
(4) Primary Business
  • Manufacture and distribution of ALA for food grade
  • Manufacture and distribution of fertilizers containing ALA (garden fertilizer and agricultural fertilizer)
  • Distribution of health foods supplements and cosmetics containing ALA
  • Manufacture and distribution of ALA for feed grade
  • Manufacture and distribution of ALA for research use grade
(5) Paid-in Capital \462,500,000
(6) Date of Establishment December 1, 2004
(7) Number of Issued Shares 18,300
(8) Accounting Period March 31
(9) Major Shareholders and Shareholding Ratio

100%

COSMO OIL CO., LTD.
(10) Operational Results and Financial Conditions for the Most Recent Years (Apr.2014 - Mar.2015)
Net Assets \321 million
Total Assets \1,100 million
Net Assets per Share \17,568.84
Net Sales \510 million
Operating Income \65 million
Ordinary Income \62 million
Net Income \37 million
Net Income per Share \2,042.91

5. Status after the Corporate Split

COSMO’s name, scope of business, address, names and positions of representatives, paid-in capital and fiscal year-end will not change as a result of this corporate split.

6. Outlook

This corporate split will not have a material impact on COSMO’s consolidated business performance because it concerns a corporate split of a wholly-owned subsidiary of the Company.

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