OREANDA-NEWS. March 09, 2012. The Board of Directors of Sumitomo Metal Industries, Ltd. (Sumitomo Metals) decided today to subscribe to the class A shares (preferred shares) of SUMCO Corporation (SUMCO) through a third-party allotment. SUMCO is an equity-method affiliate of Sumitomo Metals.

 1. Reasons for subscription of class A shares (preferred shares)

SUMCO has announced its ЃgBusiness Reorganization PlanЃh to improve profits through withdrawal from some businesses, consolidation of production sites, and measures concerning its workforce. Costs associated with execution of the plan are expected to decrease SUMCOЃfs net worth significantly. In response to this, SUMCO decided to request subscription to its issue of preferred shares by means of a third-party allotment.

 Sumitomo Metals decided to accept SUMCOЃfs request for subscription for the class A shares in the amount of 15 billion yen as we believe the execution of the ЃgBusiness Reorganization PlanЃh and improvement of SUMCOЃfs profitability will lead to increase in its corporate value.

2. Sumitomo MetalsЃf subscription of class A shares (preferred shares)
 (Please refer to SUMCOЃfs release ЃgNotice on Issuance of Shares by Third-Party AllotmentЃh  which was published today for further details.)(1) Subscription price 100 million yen per share
(2) Type and number of shares
      to be subscribed 150 shares of class A shares
(3) Total amount of subscription 15 billion yen of the total 45 billion yen issue
(4) Due date of payment May 11, 2012
(5) Preference dividend rate  2.5% (cumulative)

(6) Rights to acquire shares of

     common stock Sumitomo Metals to have the rights to acquire shares of common stock after 3 years from the due date of payment of the class A shares
(7) Rights of recourse Sumitomo Metals to have the rights to request recourse of the shares up to the distributable amount as dividend, as stipulated by the Companies Act of Japan after 3 years from the due date of payment of the class A shares.Ѓ@In case of a recourse, Sumitomo Metals will receive class B shares for the amount equivalent to 20% of the recourse amount.


3. Corporate Data regarding SUMCO(1) Corporate name SUMCO Corporation
(2) Representative Yoichi Taguchi
(3) Head office 1-2-1 Shibaura, Minato-ku, Tokyo 105-8634
(4) Established July 30, 1999
(5) Main businesses Manufacture and sales of silicon wafers for semiconductors and solar cells
(6) Fiscal year Ends at the end of January
 (7) Number of employees 8,814 (consolidated, as of December 31, 2011)
(8) Net assets 208.2 billion yen (consolidated, as of Oct. 31, 2011)
(9) Total assets  523.5 billion yen (consolidated, as of Oct. 31, 2011)
(10) Capital 114.1 billion yen (consolidated, as of Oct. 31, 2011)

(11) Total outstanding shares

        Shares held by Sumitomo Metals  
 257,751,000 shares of common stock
 71,700,000 shares of common stock (27.82%)


4. Impact on Sumitomo MetalsЃf earnings
 The subscription for the preferred shares is not expected to affect Sumitomo MetalsЃf earnings for the current fiscal year ending on March 31, 2012.