[May 25, 2018] |
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LINE Corporation Establishes New Subsidiary by Company Split (Simplified Incorporation-Type Company Split)
LINE Corporation (NYSE:LN) (TOKYO:3938) (Headquarters: Shinjuku-ku,
Tokyo, Japan; Representative Director and CEO: Takeshi Idezawa; the
"Company") announced that the Company has decided at the board of
directors meeting held today to establish a new wholly-owned subsidiary,
LINE Digital Frontier Corporation (the "New Company"), by a simplified
incorporation-type company split to succeed the Company's LINE Manga and
LINE Comics businesses (the "Split").
Since this is a simplified incorporation-type company split solely
involving the Company, certain information is omitted from this
announcement.
1. Purpose of the Company Split
The LINE Manga business operated by the LINE Group provides users in
Japan and Taiwan with a smartphone-based digital comic service that
allows them to purchase and read manga and novellas on their mobile
devices. Further, the LINE Group has been publishing popular, LINE
Manga-exclusive titles as comics and selling them at book stores across
Japan since 2015.
In order to further expand the LINE Manga and LINE Comics businesses in
Japan and abroad, the Company has decided to convert these businesses
into a wholly-owned subsidiary by means of a company split. Through
these means, the Company aims to make these businesses more competitive
and improve the corporate value of the entire LINE Group by clarifying
the management responsibilities for the business as an independent
company, as well as accelerating the decision-making process and
creating a business that can operate flexibly.
2. Summary of the Company Split
(1) Company Split Schedule
Date of approval of the incorporation-type company split plan: May 25,
2018
Date of the company split (effective date): July 2, 2018 (scheduled)
Note:
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The Split will be performed without the approval of the general
shareholders' meeting as it fulfills the requirements for a
simplified split per Article 805 of the Companies Act.
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(2) Method of the Company Split
The method of the contemplated company split is a simplified
incorporation-type company split, with the Company as the company to be
split and the New Company as the newly established company.
(3) Allotment of Shares Related to the Company Split
The New Company will issue 7,000 shares of stock to the Company upon
completion of the Split.
(4) Treatment of Stock Acquisition Rights and Bonds with Stock
Acquisition Rights of the Splitting Company
There will be no changes to the treatment of stock acquisition rights
issued by the Company upon completion of the Split.
(5) Change in Capital Upon Company Split
There will be no change in capital of the Company upon completion of the
Split.
(6) Rights and Obligations to be Succeeded to the New Company
The New Company will succeed to certain rights and obligations for
assets, liabilities, and contractual commitments (including any rights
and works ancillary thereto) pertaining to the LINE Manga and LINE
Comics businesses (excluding businesses regarding prepaid instruments
used in its businesses).
(7) Expectation of the Fulfillment of the Company's Obligations
The Company and New Company expect that there will be no issues as to
the certainty of fulfilling their respective obligations upon completion
of the Split.
3. Overview of Companies Involved in the Company Split
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Splitting Company (as of March 31, 2018)
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Formed and Successor Company (planned to be established on
July 2, 2018)
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(1) Name
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LINE Corporation
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LINE Digital Frontier Corporation
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(2) Location
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4-1-6 Shinjuku, Shinjuku-ku, Tokyo
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4-1-6 Shinjuku, Shinjuku-ku, Tokyo
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(3) Name and title of representative
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Takeshi Idezawa, Representative Director and CEO
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Takeshi Idezawa, Representative Director and CEO
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(4) Business
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Operation of its Core Business (including advertising services,
sticker sales, and game services) and Strategic Business (including
FinTech, AI, and commerce services), both of which operate on the
foundation provided by LINE mobile messaging app.
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Operation of digital comic service
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(5) Capital
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92,729 million yen
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100 million yen (tentative)
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(6) Date of establishment
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September 4, 2000
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July 2, 2018 (tentative)
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(7) Total number of issued shares
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238,785,310 shares
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7,000 shares (tentative)
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(8) Fiscal year end
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December 31
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December 31
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(9) Major shareholders and ownership percentage (as of December
31, 2017)
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NAVER Corporation: 73.37% Moxley & Co. LLC: 4.01% Jungho
Shin: 1.99%
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LINE Corporation: 100%
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(10) Operating results and financial position of company subject to
split for the latest fiscal year (consolidated) (Unless otherwise
specified, the table is shown in units of million yen)
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Fiscal year
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December 2017
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Net assets attributable to owners of the parent
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185,075
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Total assets
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303,439
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Net assets per share (yen)
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779.30
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Revenues
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167,147
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Operating profit
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25,078
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Profit before tax from continuing operations
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18,145
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Profit for the year attributable to owners of the parent
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8,078
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Basic profit per share (yen)
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36.56
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Note
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1:
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Consolidated financial statements are prepared in accordance with
International Financial Reporting Standards ("IFRS").
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2:
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Total number of issued shares increased by 1,172,332 shares due to
third party allotment of new shares on April 25, 2018.
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(11) Outline of Business Division to be Split
(i) Business of Division to be Split
Operation of businesses related to the LINE Manga digital comic service
and LINE Comics.
(ii) Operating Results of Business Division to be Split
Revenue for the year ended December 2017: 1,777,878,942 yen
(3) Items and Book Values of Assets and Liabilities to be Split
(As of March 31, 2018)
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Asset
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Liability
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Item
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Book value (thousand yen)
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Item
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Book value (thousand yen)
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Current assets
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1,384,435
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Current liabilities
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809,978
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Fixed assets
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164,559
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Fixed liabilities
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711
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Total
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1,548,994
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Total
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810,689
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Note:
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Final figures for the assets/liabilities to be split will be
determined by adjustment of increases and decreases accrued up to
the effective date of the Split.
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4. Status after the Company Split
There will be no changes to the Company's name, location, name and title
of representative, business, capital and fiscal year-end upon the
completion of the Split.
5. Future Projections
This Split will have no effect on the Company's consolidated earnings.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180525005740/en/
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