Press Release
Capital structure review of two subsidiaries of Chubu Electric Power
July 01, 2024
Chubu Electric Power Co.,Inc.
Chubu Electric Power Grid Co.,Inc.
Chubu Electric Power Co., Inc. (President and Director: Kingo Hayashi, "Chubu Electric Power") has decided today to review the capital structure of TOENEC CORPORATION (President: Tsuguhisa Takimoto, "TOENEC") and Chubu Seiki Co., Ltd. (President: Hiroya Komichi, "Chubu Seiki") in order to eliminate the state of conflict with entrustment regulations and for the further future growth of both companies. Specifically, Chubu Electric Power will sell a portion of its shares in TOENEC ("the share sale"), and all of Chubu Seiki's shares will be transferred to Chubu Electric Power Grid Co., Inc (President and Director: Ryuuichi Shimizu, "Power Grid") through an absorption-type split ("the transfer").
1 Background of the share sale and the transfer
(1) Elimination of the state of conflict with entrustment regulations
Power Grid has confirmed that some of the operations entrusted to TOENEC and Chubu Seiki have been improperly handled, which is prohibited under the Electricity Business Act.
The Electricity Business Act prohibits a general transmission and distribution utility from providing undisclosed information (Note2) to its specified affiliated companies (Note1) or subsidiaries of specified affiliated companies for the purpose of entrustment of transmission and distribution of electricity (Note3) ("Entrustment Regulations").
Power Grid has confirmed that customer names, addresses, contact information, etc. provided to TOENEC and Chubu Seiki after the spin-off in April 2020 are undisclosed information and in conflict with Entrustment Regulations. ("the case").
This is determined due to the fact that Chubu Electric Power did not clearly confirm the interpretation of the undisclosed information regarding Entrustment Regulations at the time of the spin-off in April 2020.
In order to eliminate the conflicts as soon as possible, Chubu Electric Power has decided to implement the share sale and the transfer.
We take the case very seriously as inappropriate handling prohibited by the Electricity Business Act, and apologize for the concern it has caused to our customers and everyone else involved.
Chubu Electric Power and Power Grid will make every effort to ensure compliance, including adherence to conduct regulations.
[Entrusted work and the undisclosed information provided]
Name of entrustee |
Entrustment work |
Undisclosed information provided |
---|---|---|
TOENEC |
Power distribution construction work |
Names, addresses, contact information, etc. of customers in the construction and surrounding areas |
Meter replacement work |
Name, address, contact information, etc. of customer subject to construction |
|
Chubu Seiki |
Meter replacement work |
Name, address, contact information, etc. of customer subject to construction |
(Note1) Specified affiliated company means a party that falls under one of the following group relationships with a general transmission and distribution utility:
- Parent companies, subsidiaries, subsidiaries of parent companies, etc. that are either retail electricity utilities or power generators
- Subsidiaries, etc. of the parent company that have subsidiaries, etc. which are either retail electricity utilities or power generators
(Note2) Undisclosed information means information that has not been publicly disclosed concerning the Wheeling Service, etc. operated by a general transmission and distribution utility and that could affect the Retail Electricity Business, the Power Generation Business, or the Specified Wholesale Supply Business.
(Note3) Transmission and distribution services refer to services such as Wheeling Service and other services related to substation, transmission and distribution of electricity.
(2) Further growth of TOENEC and Chubu Seiki in the future
As an integrated facility company, TOENEC is involved in a broad range of facility management and construction/repair work on power supply, electrical, air conditioning, hygiene and information and telecommunication facilities to energy facilities, including solar power generation and household facilities. Currently, the company is working to realize its vision of "Toward an Integrated Equipment Engineering company that continue to grow in tandem with all stakeholders" by implementing growth strategies in accordance with its Medium-term Management Plan 2027 and taking actions to achieve management that is conscious of capital costs and stock price.
The share sale will contribute to the enhancement of TOENEC's management independence and mobility in the midst of diversifying social and customer needs, such as the realization of a carbon neutral society, and will lead to the achievement of the medium-term management plan and ultimately to the enhancement of the Chubu Electric Power Group's corporate value as a whole. Chubu Electric Power will continue to support TOENEC's business development as a united group, while placing importance on its autonomy.
Chubu Seiki is in the business of manufacturing, repairing, and servicing smart meters and other electrical measurement equipment and systems. In addition, to realize its Management Vision 2030, Chubu Seiki is aggressively expanding its business areas, such as operation and maintenance of power distribution control systems, sophistication of distribution operations such as electricity meter delivery service, and installation of electrical and communication equipment, etc.
Through the transfer, Power Grid will further deepen its cooperation with Chubu Seiki to further increase its profitability, and will support the expansion of its business areas, including businesses related to next-generation smart meters and drones.
Chubu Electric Power and Power Grid will further develop the business relationship with TOENEC and Chubu Seiki, important members of the Chubu Electric Power Group that support the safe, affordable, and stable supply of electric power, and will strive to improve the corporate value of the entire group by demonstrating its comprehensive capabilities in energy-based businesses.
2 Outline of the share sale
Chubu Electric Power will sell a portion of its holdings of TOENEC shares by way of the secondary distribution ("the distribution"). As a result of the distribution, TOENEC will change from a subsidiary of Chubu Electric Power to an affiliated company.
For details of the distribution, please refer to the "Notice of secondary distribution of shares and change of parent company and other related companies" released today by TOENEC.
Number of shares to be sold |
1,400,000 shares (planned) |
|
Percentage of voting rights (Note) |
Before sale |
51.9% |
After sale |
44.4%(tentative) |
(Note) Percentage of voting rights of all shareholders
3 Outline of the transfer
All of Chubu Seiki's shares (112,000 shares) held by Chubu Electric Power will be transferred to Power Grid through an absorption-type splitting in which Chubu Electric Power will be the splitting company and Power Grid will be the successor company. Accordingly, Chubu Seiki will change from a subsidiary of Chubu Electric Power to a subsidiary of Power Grid. For details of the transfer, please refer to the attached material "Notice of transfer of shares of Chubu Seiki Co., Ltd. to Chubu Electric Power Grid Co., Ltd. by company split (simplified absorption-type split)".