Chubu Electric Power Co.,Inc. | On the Absorption-type Split Agreement Related to the Spinning Off of the General Transmission and Distribution Business and Retail Electricity Business - Press Releases(2019)
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Press Release 2019

On the Absorption-type Split Agreement Related to the Spinning Off of the General Transmission and Distribution Business and Retail Electricity Business

April 26, 2019

Chubu Electric Power Co.,Inc.

Today, Chubu Electric Power concluded absorption-type split contracts with the Chubu Electric Power Transmission and Distribution Business Split Preparation Company (hereinafter Transmission and Distribution Split Preparation Company) and the Chubu Electric Power Retail Electricity Business Split Preparation Company (hereinafter Retail Electricity Split Preparation Company) regarding the spinning off of the general transmission and distribution business and retail electricity business. (The direction under which the company will split have been announced on November 27, 2018).

This company spin off requires the permission and authorization of the competent ministry. The company split of the general transmission and distribution business requires approval in the Chubu Electric Power Stockholders’ Meeting to be held on June 26, 2019.

1 Objective of the company split

The Electricity Business Act requires the legal unbundling of the power generation and retail business, and the transmission and distribution business by April 2020 to ensure the neutrality of the electricity transmission and distribution industry. In the retail electricity space, we are collaborating with actors in a variety of other fields, in an attempt to actively expand our business and enhance our services.

In light of this environment, Chubu Electric Power has decided to spin off the general transmission and distribution business and retail electricity business, respectively.

2 Overview of the absorption-type split agreement

(1)Type of company split

Chubu Electric Power will be the split company with the Transmission and Distribution Split Preparation Company and the Retail Electricity Split Preparation Company as the successor companies in the absorption-type split.

(2)Stock allocations for the company split

The Transmission and Distribution Split Preparation Company will issue 18.9 million ordinary shares and the Retail Electricity Split Preparation Company 800 thousand ordinary shares at the time of the split, all of which will be allocated to Chubu Electric Power.

(3)Changes in stated capital due to the company split

Chubu Electric Power’s stated capital will not change due to the split.

(4)Rights and obligations to be succeeded

On the day that the contract goes into effect, the rights and obligations associated with the general transmission and distribution business, electric communications business, and related businesses currently conducted by Chubu Electric Power will be succeeded by the Transmission and Distribution Split Preparation Company. The electricity retail business, gas business and related businesses currently conducted by Chubu Electric Power will be succeeded by the Retail Electricity Split Preparation Company.

The obligations related to Chubu Electric Power’s existing publicly offered corporate bonds will not be succeeded by the successor companies. A separate mechanism to protect the rights of the creditors is being planned.

(5)Projected schedule

Conclusion of the absorption-type split contract

April 26, 2019

Approval of the absorption-type split contract in the Shareholders Meeting (Chubu Electric Power (Note) and each succeeding company)

Jun 26, 2019(scheduled)

Date on which the absorption-type split goes into effect

April 1, 2020(scheduled)

(Note)Only required for the spinning off of the general transmission and distribution business.

3 Overview of the companies involved in the split (as of April 1, 2020 (scheduled))

Trade name

Chubu Electric Power Co.,Inc.
(Split company)

Chubu Electric Power Transmission and Distribution Business Spilt Preparation Company Incorporated
(Successor company)

Chubu Electric Power Retail Electricity Business Split Preparation Company Incorporated
(Successor company)

Location

1, Higashi-shincho, Higashi-ku, Nagoya-shi, Aichi Prefecture

1, Higashi-shincho, Higashi-ku, Nagoya-shi, Aichi Prefecture

1, Higashi-shincho, Higashi-ku, Nagoya-shi, Aichi Prefecture

Position and name of the representative

President & Representative Director
Satoru Katsuno

President & Representative Director
Yaoji Ichikawa

President & Representative Director
Kingo Hayashi

Business description

Management of group companies, nuclear/renewable energy businesses, etc.

General transmission and distribution business, electric communications business, etc.

Electricity retail business, gas business, etc.

Stated capital

430.777 billon yen

40 billion yen

4 billion yen

Fiscal year end

March 31

March 31

March 31