NEC Corporation ("NEC"; TSE: 6701) announced today that NEC has determined to transfer (i) all shares of NEC Energy Devices, Ltd. ("NEC Energy Devices") owned by NEC to Envision Electrodes Corporation Ltd ("Company"), a member of Envision Group ("Envision"), a renewable energy company, and (ii) all shares of Automotive Energy Supply Corporation ("AESC") owned by NEC and NEC Energy Devices to Nissan Motor Co., Ltd. ("Nissan"), thereby enabling Nissan to transfer all shares of AESC to Envision.
The transfer of NEC Energy Devises shares to Envision and AESC shares to Nissan is subject to the fulfillment of the conditions outlined below in "1. About the transfer of shares." If these transfers are executed, capital gain will occur.
1. About the transfer of shares
NEC is focusing on Solutions for Society businesses. In the smart energy field, NEC is shifting towards services for the construction, operation, and maintenance of electric storage systems to support goals such as stabilizing power grids and improving the efficiency of companies' energy use.
Based on this policy, NEC had determined to transfer all shares of AESC owned by NEC and NEC Energy Devices to Nissan, thereby enabling Nissan to transfer all shares of AESC, as well as Nissan's electric battery operations and production facilities, to GSR Capital ("GSR"), a private investment fund, as described in the "Regarding the recording of gain from the transfer of shares in an affiliated company accounted for by the equity-method" press release dated August 8, 2017. NEC had also determined to transfer shares of NEC Energy Devices owned by NEC to GSR as described in the "Regarding the recording of gain from the transfer of shares in a consolidated subsidiary" press release dated December 4, 2017. Those transactions were scheduled to be executed on June 29, 2018 as all precedent conditions were fulfilled, however, those transactions were not executed as GSR failed to fulfill the purchaser's payment obligations under those transactions, due to lack of funds. After that, Nissan and NEC entered into negotiations with Envision and, as Nissan and NEC agreed to deal with Envision, NEC has determined to transfer NEC Energy Devices shares and AESC shares as described in "2. Share transfer summary" below.
The transfer of NEC Energy Devices shares to the Company and AESC shares owned by NEC and NEC Energy Devices to Nissan is respectively subject to (i) the fulfillment of the closing conditions of the other share transfer agreement, and (ii) the fulfillment of the closing conditions of the share transfer between Nissan and Envision.
The transfer of NEC Energy Devices shares to the Company and AESC shares owned by NEC and NEC Energy Devices to Nissan is scheduled to be executed on the same day as the transfer of AESC shares to Envision by Nissan.
2. Share transfer summary
(1)Transferred shares and transferee
(2)Scheduled Transfer Date
March 29, 2019
3. Future outlook
Approximately 10.0 billion yen in operating profit upon execution of the transfer of the NEC Energy Devices shares and approximately 10 billion yen in non-operating income upon execution of the transfer for AESC shares are expected to be recorded in the consolidated financial statement for the fiscal year ending March 31, 2019. This profit and income, however, has already been incorporated in the financial forecasts for the fiscal year ending March 31, 2019.
This material contains forward-looking statements regarding estimations, forecasts, targets and plans in relation to the results of operations, financial conditions and other overall management of the NEC Group (the "forward-looking statements"). The forward-looking statements are made based on information currently available to NEC and certain assumptions considered reasonable as of the date of this material. These determinations and assumptions are inherently subjective and uncertain. These forward-looking statements are not guarantees of future performance, and actual operating results may differ substantially due to a number of factors.
NEC Corporation & Profibusiness.world
August 13, 2018