Press Releases and Other Company News January 2007

Reference : Concerning the Takeover of Toenec Corporation's Shares and the Transfer of Business Operations Based on the Corporate Split-up of TOENEC Corporation and C-Tech Corporation

January 31, 2007
Chubu Electric Power Co.,Inc.

Our company until today has been restructuring the group companies and has been deploying aggressively various initiatives to strengthen the group management and we have the pleasure to announce you the decision of the Board of Directors Meeting held in Japan concerning the two initiatives regarding Toenec Corporation (hereinafter called "Toenec") , which is a central reality to the Group Companies.

Firstly, our company has taken over Toenec since it has acquired the majority of the total of the already issued shares of Toenec, which shall become a subsidiary company.

Secondly, Toenec and C-Tech (hereinafter called C-Tech), which is a subsidiary of this company, shall have their respective business operations transferred based on the split-up of the operation both companies.

The present company aims at a durable growth as a "General Energy Service Industrial Group" and it is projecting to improve the overall ability of the group by further deepening to a higher level the cooperation between the group companies through this initiative.

1. The Takeover Bid of Toenec Corporation's Shares

(1) Purpose

At present Toenec plays an important role as a company engaging in electrical power business and as a core company that is operating our company's power distribution facilities.

In addition, our company shall be able to apply the highly advantageous technical edge and expertise relevant to electricity/air-conditioning installation construction works and suchlike owned by Toenec, since it shall allow us to respond appropriately to our customers' varied demands for high quality and low cost electric power. We believe that we can deploy an energy solution services that shall give full play to the overall ability of the Chubu Electric Power Group.

Accordingly, we shall even further strengthen our capital ties with Toenec since it shall play an even more important role within our group.

(2) Content

a) The Takeover Bid Value

650 Japanese Yen per share

  • • A premium of approximately 30.78% to the simple arithmetic average closing price of Japanese Yen 497 on the Tokyo Stock Exchange for Toenec's shares during the past one month until January 30, 2007 was added to the price.
  • • A premium of approximately 30.00% to the closing price of 500 Japanese Yen for the share of the same company on the Tokyo Stock Exchange on January 30, 2007 was added to price.

b) Number of Shares Scheduled for Purchase and Purchasing Conditions

24,020,000 shares (In the event that the company purchases all the number of shares scheduled for the initial takeover, the company's capital subscription shall be: 50.01 %.)

In addition, the following conditions are attached to the purchase:

  • • The company shall purchase all the subscription shares in the event that the total subscription shares do not exceed the scheduled purchase fixed number (24,020,000 shares).
  • • The company shall not purchase fully or partially any excess amount in the event that the total number shares exceed the scheduled purchased fixed number (24,020,000 shares).

c) Purchase period

From February 1 (Thursday), 2007 to March 1 (Thursday) (20 business days)

In addition, the official tender starting announcement date shall be February 1 (Thursday), 2007.

2. Business Operations Transfer Based on the Split-up of the Operations of Toenec Corporation and C-Tech Corporation

(1) Purpose

The civil engineering/power distribution divisions of both companies, Toenec and C-Tech, shall be restructured as to project an improvement in the overall ability of the group as a whole based on the concentration of management resources to build a structure that shall allow us to enforce the maintenance/engineering works of the facilities efficiently, and appropriately, to deepen even further cooperation between both companies and each division of the company.

(2) Content

a) Concerning the operations of the power transmission/substation facilities and installation engineering works of the buried cable lines, Toenec shall be split-up and C-Tech shall take over these operations as "bridge-company" (absorbing the partitioned operations).

b) Concerning the operations of the buried distribution cable lines of C-Tech, C-Tech shall be split-up and to Toenec shall take over these operations as "bridge-company" (absorbing the partitioned operations).

c) Schedule
October 1, 2007 (Scheduled)

(Reference) An Outline of Both Companies (March 31, 2006)

  Toenec Corporation C-Tech Corporation
Content of
Operations
Electric Power Plants Engineering Works, Air-Conditioning/Sanitation/Waterworks/Fire-fighting Installation Engineering Works and other related business Electric power generation/transmission substation/inspection/maintenance and repairs, Information and telecommunication Engineering works, Civil engineering works, and other related business
Date of
Establishment
October 1, 1944 October 1, 1962
Representative Representative President:
Yasuhiro Noda
Representative President:
Masao Shimizu
Capital 7,680,785,924 Japanese Yen 720,000,,000 Japanese Yen
Number of
Employees
5,413 Employees (Consolidated) 1,607 Employees
Major Shareholders and
Holding Ratio
September 30, 2006
Chubu Electric Power Co., Inc. 25.15%
Toenec Employees 8.42%
Mitsubishi Tokyo UFJ Bank 2.87%
Nippon Trustee-Service Trust 2.19%
Nippon Life Insurance 1.94%
Chubu Electric Power Co., Inc. 67.65%
Chubu Kogyo Co., Inc. 32.35%
Sales in FY 2005 180,660 millions Jappeuse Yen (Consolidated) 54,635 million Japanese Yen