Notice of Change of the Share Unit Number, Consolidation of Share, and Partial Amendment to the Articles of Incorporation in Conjunction Therewith

May 16, 2016

TOKYO, May 16, 2016 – Kobe Steel, Ltd. (the “Company”) announces that it passed a resolution at its meeting of the Board of Directors held today to make a partial amendment to the Articles of Incorporation to change the share unit number pursuant to the Article 195, Paragraph 1 of the Companies Act and to submit the matter of the share consolidation to the 163rd Ordinary General Meeting of Shareholders scheduled to be held on June 22, 2016 (the “Ordinary General Meeting of Shareholders”).

Both the partial amendment to the Articles of Incorporation and the share consolidation are to take effect on October 1, 2016, subject to the approval of the proposal regarding the share consolidation at the Ordinary General Meeting of Shareholders.

1. Change of the Share Unit Numbers

(1) Reasons for the Change

For the greater convenience of investors, all Japanese securities exchanges are promoting an “Action Plan for Consolidating Trading Units,” under which trading units of common shares (share unit numbers) for domestically listed companies are uniformly set at 100 shares by October, 2018.
In light of the intent of this action plan, the Company, whose shares are listed on the Tokyo Stock Exchange and Nagoya Stock Exchange, decided to change the share unit number from 1,000 shares to 100 shares as of October 1, 2016.

(2) Particulars of the Change

The share unit number will be changed from 1,000 shares to 100 shares.

(3) Conditions to the Change

Partial amendment to the Articles of Incorporation for this matter has been made by resolution at the meeting of the board of directors in accordance with the provisions of the Companies Act. Such partial amendment to the Articles of Incorporation, however, is to take effect on October 1, 2016, subject to approval at the Ordinary General Meeting of Shareholders of the proposal regarding the share consolidation set forth in 2. below.

2. Share Consolidation

(1) Objectives of Consolidation

As discussed in 1. above, in changing the share unit number from 1,000 shares to 100 shares, the Company decided to carry out a share consolidation of the Company shares under which every 10 shares will be consolidated into 1 share (the “Share Consolidation”), in order to maintain the price level per trading unit as the current price level, which is within the range of price level Stock Exchange states as preferable (from JPY 50,000 less than JPY 500,000 per unit), and in order to keep the number of voting rights of shareholders following the change of the unit of shares.
The Company decided to reduce its total number of authorized shares from 6 billion shares to 600 million shares according to the ratio of the Share Consolidation.

(2) Particulars of Consolidation

(i) Class of shares to be
consolidated
Common shares
 
(ii) Consolidation ratio
On October 1, 2016, shares held by shareholders recorded in the latest register of shareholders as of September 30, 2016 will be consolidated at the ratio of 10 shares to 1 share.
(iii) Total number of authorized
shares after consolidation
600,000,000 shares (6,000,000,000 shares before consolidation)
 
(iv) Number of shares reduced
through consolidation
Outstanding shares before consolidation (as of March 31, 2016) 3,643,642,100 shares
Number of shares reduced through consolidation 3,279,277,890 shares
Issued shares after consolidation 364,364,210 shares

Note: “Number of shares reduced through consolidation” is a theoretical value obtained by the multiplication of the aggregate number of the issued shares before consolidation and the consolidation ratio.

(v) Number of shareholders
reduced through consolidation
The shareholder composition based on the register of shareholders as of March 31, 2016 is as follows:
Number of holding shares Number of shareholders
(percentage of total)
Total number of shares
(percentage of total)
Fewer than 10 shares 5,375 (2.44%) 22,588 shares (0.00%)
10 or more shares 214.636 (97.47%) 3,643,619,512 shares (100.00%)
Total 220,011 (100.00%) 3,643,642,100 shares (100.00%)

If the Share Consolidation is carried out, 5,375 shareholders who hold shares fewer than 10 shares each (the total number of shares held by those shareholders is 22,588 as of March 31, 2016), will lose status as shareholders.

(vi) Treatment of fractional
shares
If any fractional shares arise as a result of the Share Consolidation, pursuant to the provisions of Article 235 of the Companies Act, the Company will sell all such fractional shares and distribute the proceeds to shareholders having fractional shares in proportion to their respective fractions.

(3) Conditions to Consolidation

Subject to the approval of the proposal regarding the Share Consolidation at the Ordinary General Meeting of Shareholders, the Share Consolidation will take effect on October 1, 2016.

3. Partial amendment to Articles of Incorporation

The Company’s Articles of Incorporation will be amended as follows on October 1, 2016 subject to the approval of the proposal regarding the Share Consolidation described in 2. above at the Ordinary General Meeting of Shareholders.

(Underlined portions are amended.)

Current Articles of Incorporation Proposed amendments
Article 6. Total Number of Shares Authorized to Be Issued and Number of Shares Constituting One (1) Unit of Stock

The total number of shares authorized to be issued by the Company shall be six billion (6,000,000,000).
The number of shares constituting one (1) unit of stock of the Company shall be one thousand (1,000).
Article 6. Total Number of Shares Authorized to Be Issued and Number of Shares Constituting One (1) Unit of Stock

The total number of shares authorized to be issued by the Company shall be six hundred million (600,000,000).
The number of shares constituting one (1) unit of stock of the Company shall be one hundred (100).

4. Summary Schedule

May 16, 2016
Resolution at the Meeting of the Board of Directors
June 22, 2016 (scheduled)
163rd Ordinary General Meeting of Shareholders
October 1, 2016 (scheduled)
Effective date of change of the share unit number, share consolidation, and partial amendment to the Articles of Incorporations

Note:
As mentioned above, the effective date of the change of the share unit number and share consolidation is scheduled to be October 1, 2016, but in relation to book-entry procedures, trades of the Company’s shares by shareholders on each securities exchange, on and after September 28, 2016, will be done in a trading unit (100 shares after the consolidation) based on the assumption of the changes as above being effective.

The information on this Web site is presented "as is." Product availability, organization, and other content may differ from the time the information was originally posted. Changes may take place without notice.

Page top