Streaksai Regulatory News (STK)

29 Dec 2005 07:58

Softbank Corp29 December 2005 December 26, 2005 Announcement of capital reduction with compensation by a consolidated subsidiary SOFTBANK Holdings Inc. (Head Office: Delaware, USA; Representative: RonaldFisher; hereafter "SBH"), a wholly-owned subsidiary of SOFTBANK CORP. ("theCompany"), today reduced its paid-in capital with compensation. The Company isto book the difference between the value of the refund for this capitalreduction and the book value of the investment of the Company in SBH, as specialincome in its stand-alone financial results. The Company assumes to apply therefund to repay a part of its borrowings from SBH. Details to be explainedbelow; 1. Outline of capital reduction with compensation (1) Amount of capital reduced with compensation: approx. $803.6 million (approx. 93.3 billion yen; converted amount in yen at an exchange rate of116.13 yen/ $ as of December 26, 2005) (2) Date of execution for capital reduction with compensation: December 26,2005 2. Impact on both Stand-alone and Consolidated financial results As a result of the capital reduction, the Company assumes to book specialincome of approximately 4.9 billion yen on a stand-alone basis, for thedifference between the value of the refund and the book value of the investmentof the Company in SBH, in the 3rd quarter of the fiscal year ending March 2006.In parallel, the Company assumes to book foreign exchange loss of approximately1.2 billion yen, which arises from offsetting the refund with its borrowingsfrom SBH. As a result on the whole, the Company expects a decrease of 1.2billion yen in non-operating income and increase of 2.2 billion yen in netincome, after deducting tax expenses of 1.5 billion yen, on a stand-alone basis. On a consolidated basis, the difference between the value of refund from SBHand the book value of investment of the Company in SBH will be eliminated.Therefore the Company expects to book foreign exchange loss of 1.2 billion yenarising from offsetting its borrowings from SBH, which results in decrease of1.2 billion yen in non-operating income, while the impact on net income will bea decrease of 2.7 billion yen after deducting tax expenses of 1.5 billion yen. (Reference: Corporate income tax is tentatively calculated by multiplying theabove-mentioned amount of the impact with the effective tax rate of 40.69%.) This information is provided by RNS The company news service from the London Stock Exchange