ITOCHU Plastics to Serve as Sponsor in Business Reconstruction of Corona Kogyo Co., Ltd.
May 20, 2011
ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Masahiro Okafuji, President & CEO; hereinafter “ITOCHU”) announced today that ITOCHU Plastics Inc. (headquartered in Shibuya-ku, Tokyo; Ryuichi Komatsuzaki, President; hereinafter “CIPS”), a wholly owned subsidiary of ITOCHU, has decided to serve as a business sponsor together with the Enterprise Turnaround Initiative Corporation of Japan (hereinafter “ETIC”) in business reconstruction of Corona Kogyo Corporation (headquartered in Shinagawa-ku, Tokyo; Hiroshi Yamaguchi, President; hereinafter “Corona Kogyo”), for which ETIC on May 20 decided to provide assistance.
Corona Kogyo is one of the few companies in Japan capable of performing integrated processes ranging from molding to dyeing in the field of aluminum surface treatment. It possesses superior technologies for anodized aluminum etching and other surface treatment and holds a patent for its new ALPLAS technology for direct joining or solid casting of aluminum and resins based on surface treatment technologies; thus it has sales channels to automobile, consumer electronics, housing and living and other industries.
CIPS, which deals with plastic materials and products, had interest in ALPLAS, the new technology developed by Corona Kogyo. Looking to the sales growth potential of products incorporate ALPLAS, around the spring of 2010 it began to consider offering financial assistance, including capital participation. Recently, the Shoko Chukin Bank, Ltd. decided to act as main bank in financing its future operations. In alliance with Corona Kogyo and the Shoko Chukin Bank, CIPS filed a joint application to ETIC for business reconstruction assistance as a business sponsor and ETIC resolved to provide the assistance.
The scheme for reconstruction starts with an absorption-type company split for setting up a new Corona Kogyo. After a series of steps taken by ETIC, CIPS and ETIC are set to underwrite a capital increase for the new Corona Kogyo in August. CIPS will then invest 857 million yen, inclusive of the existing debt equity swap (DES), to hold a 49% stake. It will send two officers, including a full-time executive director responsible for sales, as well as two personnel for offering assistance in sales and business administration.
CIPS will engage mainly in helping the new Corona Kogyo with sales activities. It will build Corona Office, a dedicated internal organization with a staff of 20, in a bid to boost sales of ALPLAS products. With active use of its own overseas bases and ITOCHU’s network of overseas bases, it will target its sales activities at Japanese, Korean, Taiwanese, and Western manufacturers of home electronics, precision device, automobile and other goods that are operating overseas, especially in China and Southeast Asia.
CIPS understands that this joint assistance in Corona Kogyo’s business reconstruction in partnership with ETIC will not only help support Japan’s key export industry but also suggest a direction for corporate revival to Japanese small and midsize component manufacturers with technical capabilities. It will capitalize on the ITOCHU Group’s comprehensive strength and network to work on the assistance scheme.
Corona Kogyo Corporation
|Company Name||Corona Kogyo Corporation|
|Head Office||23-8 Takanawa 4-chome, Minato-ku, Tokyo, Japan|
|Capital||100 million yen|
|Business||Manufacturing, sale and processing of aluminum decorative products and general surface treatment processing|
|Number of Employees||
213 (including contract, temporary and part-time workers; as of March 31, 2011)