TOKYO, Japan, May 12, 2015 — Renesas Electronics Corporation (TSE: 6723, the “Company”) today announced the decision, under the approval of the Board of Directors on May 12, 2015, to submit to the ordinary general shareholders' meeting to be held on June 24, 2015 a proposal on reduction of its common stock and capital legal reserve, and appropriation of retained earnings.
1. Purpose of reduction of common stock and capital reserve and appropriation of retained earnings
Renesas is presently in a state of asset deficit, in which the value of the Company's net assets is less than its capital. In order to correct the capital composition and to improve the flexibility of the capital policy by eliminating this status, Renesas has decided to reduce the common stock and capital legal reserve by transferring them to the other capital surplus, as stipulated in Article 447, Paragraph 1 and Article 448, Paragraph 1 of the Companies Act, and then transfer the increased other capital surplus to retained earnings brought forward, as stipulated in Article 452 of the Companies Act.
Note that this measure involves a change in the classification of funds in the net assets category and not a change in the total amount of net assets of the Company. In addition, there will be no change in the total number of outstanding shares or in net assets per share, thereby there will be no effect on the number of shares held by individual shareholders.
2. Reduction of common stock
As stipulated under Article 447, Paragraph 1 of the Companies Act, the amount of common stock will be reduced and the entire amount of the reduction will be transferred to other capital surplus. The reduction in the common stock will not change the total number of outstanding shares; only the amount of common stock will be reduced.
3. Reduction of capital legal reserve
As stipulated under Article 448, Paragraph 1 of the Companies Act, the total amount of the capital legal reserve will be transferred to other capital surplus.
4. Appropriation of retained earnings
As stipulated under Article 452 of the Companies Act, after the above-mentioned “reduction of common stock” and “reduction of capital legal reserve” take effect, the total increased other capital surplus of 382.0 billion yen and 169.7 billion yen of other capital surplus will be transferred to retained earnings brought forward, cancelling out the deficit
(1) Reduced retained earning item and its amount
(2) Increased retained earning item and its amount
5. Composition of capital after reduction
(Billion Yen)
| Fiscal year ended March 31, 2015 | After implementation | Increase (Decrease) | |
|---|---|---|---|
| Common stock | 228.3 | 10.0 | (218.3) |
| Capital legal reserve | 163.8 | 0 | (163.8) |
| Other capital surplus | (376.8) | (207.1) | (169.7) |
| Retained earnings brought forward | (551.7) | 0 | +551.7 |
| Total shareholders 'equity | 217.1 | 217.1 | ±0 |
6. Schedule
Impact on Renesas' Financial results
The above measure involves reassignments of funds within the net assets category and will not have any impact on Renesas' business performance.
Forward-Looking Statements
The statements in this press release with respect to the plans, strategies and financial outlook of Renesas Electronics and its consolidated subsidiaries (collectively “we”) are forward-looking statements involving risks and uncertainties. We caution you in advance that actual results may differ materially from such forward-looking statements due to several important factors including, but not limited to, general economic conditions in our markets, which are primarily Japan, North America, Asia, and Europe; demand for, and competitive pricing pressure on, products and services in the marketplace; ability to continue to win acceptance of products and services in these highly competitive markets; and fluctuations in currency exchange rates, particularly between the yen and the U.S. dollar. Amongst other factors, downturn of the world economy; deteriorating financial conditions in world markets, or deterioration in domestic and overseas stock markets may cause actual results to differ from the projected results forecast.
About Renesas Electronics Corporation
Renesas Electronics Corporation (TSE: 6723) delivers trusted embedded design innovation with complete semiconductor solutions that enable billions of connected, intelligent devices to enhance the way people work and live. A global leader in microcontrollers, analog, power and SoC products, Renesas provides comprehensive solutions for a broad range of automotive, industrial, infrastructure, and IoT applications that help shape a limitless future. Learn more at renesas.com. Follow us on LinkedIn, Facebook, Twitter, and YouTube.
The content in the press release, including, but not limited to, product prices and specifications, is based on the information as of the date indicated on the document, but may be subject to change without prior notice.