Press Releases 2006

Merger of two consolidated subsidiaries

Dec. 15, 2006

SOFTBANK CORP. announces that the board of directors meeting of SOFTBANK TELECOM SALES Corp. (Head office: Minato-ku, Tokyo; Representative: Ken Miyauchi; hereinafter “SBTS”) and SOFTBANK TELECOM Corp. (Head office: Minato-ku, Tokyo; Representative: Masayoshi Son; hereinafter “SBTM”) resolved today a merger as follows;

1. Purpose of merger

To accelerate business development of SBTM within the SOFTBANK Group and strengthen its financial structure by merging with SBTS based on the Group’s management policy which is to strengthen the operational base

2. Outline of merger

(1) Merger schedule

December 15, 2006 Board of directors meeting to approve merger agreement in both parties
January 19, 2007 Extraordinary General Meeting to approve merger agreement (planned)
February 1, 2007 Effective date of merger (planned)

(2) Method of merger

SBTS as an ongoing concern shall absorb SBTM, which shall be subsequently dissolved. SBTS is scheduled to change its corporate name to SOFTBANK TELECOM Corp. after the merger.

(3) Share to be issued upon merger

SBTS will issue 1,960,300 common shares upon merger in exchange for the shares of SBTM 169,455,424 common shares and SBTS 1,076,200 common shares, and SBTM 139,200,000 preferred shares and SBTS 884,100 common shares respectively, for the shareholders who were registered or recorded on the SBTM’s latest shareholders’ list as of the previous day of effective date of merger.

(4) Capital and reserve to be increased for the merger

No increase or decrease of SBTS capital and its reserve occurs due to the merger.

3.Outline of companies concerned (as of December 1, 2006)

  Surviving company Company which shall be absorbed
Corporate name SOFTBANK TELECOM SALES Corp. SOFTBANK TELECOM Corp.
Type of business Fixed-line business, investment business Fixed-line business
Date of incorporation March, 1999 August, 2002
Location of head office 1-9-1 Higashi-Shimbashi, Minato-ku, Tokyo 1-9-1 Higashi-Shimbashi, Minato-ku, Tokyo
Representative Ken Miyauchi Masayoshi Son
Common stock 100 million yen 145,800 million yen
Shares outstanding Common shares 826,300 Common shares 169,455,424
Preferred shares 139,200,000
Net assets*1 8,424 million yen 123,148 million yen
Total assets*1 11,380 million yen 473,030 million yen
Settlement of accounts March 31 March 31
Principal shareholders and ownership ratios SOFTBANK CORP. 100% SOFTBANK CORP. 100%
Business result for the recent 3 fiscal years ended March 31*2
(Unit: million yen)
FY 2004 FY 2005 FY 2006 FY 2004 FY 2005 FY 2006
Net sales 410 541 172 172,117 335,804 353,717
Operating income (loss) (1,489) (1,348) (497) (1,561) (52,110) (20,988)
Ordinary income (loss) (2,413) 6,200 1,013 (1,449) (54,887) (36,014)
Net income (loss) 14,589 3,739 20,438 (49,959) (81,634) (87,636)
Net income per share (yen) 17,656 4,525 24,735 (51,002) (480) (330)
[Notes]
  • *1As of March 31, 2006
  • *2Figures of SOFTANK TELECOM Corp. is under consolidated base. Since closing term change was made for the period ended March 2004, figures are for 6 months from October 1, 2003 to March 31, 2004.

4. Post-merger information

(1) Corporate name SOFTBANK TELECOM Corp.
(2) Type of business Fixed-line business
(3) Location of head office 1-9-1 Higashi-Shimbashi, Minato-ku, Tokyo
(4) Representative Masayoshi Son
(5) Common stock 100 million yen
(6) Settlement of accounts March 31

5. Impacts on financial results

Impacts due to this merger are under study as of today and will be communicated as soon as when confirmed.

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