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Notice regarding Subscription for Shares of MODEC through Third Party Allotment and Business Alliance with MODEC

Feb. 26, 2010


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MITSUI & CO., LTD. ("MITSUI") hereby announces that MITSUI decided to subscribe for shares of MODEC Inc. ("MODEC") through a third party allotment (the "Third Party Allotment") to be conducted by MODEC and entered into a business alliance agreement with MODEC.
Following the subscription for shares in the Third Party Allotment, the shareholding ratio of MITSUI in the total number of shares outstanding of MODEC will be 14.99%.

1. Reasons for Subscription for shares in the Third Party Allotment and Business Alliance

While the development and production activities of offshore oil and gas fields in deep sea area are expected to continue to be active in the future, MITSUI believes it is important to expand its business in these fields. Therefore, MITSUI decided to subscribe for shares of MODEC in the Third Party Allotment in order to further deepen its alliance and strengthen its cooperative relationship with MODEC, as well as to enhance MODEC's financial position.

2. Details of Subscription for shares in the Third Party Allotment and Business Alliance

(1) Outline of Subscription for shares in the Third Party Allotment

(1) Type and number of shares to be subscribed 4,491,000 shares of common stock
(2) Issue price 1,732 yen per share
(3) Total amount 7,778,412,000 yen
(4) Number of shares held by MITSUI and shareholding ratio of MITSUI before subscription 2,466,500 shares of common stock (6.59%)
(5) Number of shares to be held by MITSUI and shareholding ratio of MITSUI after subscription 6,957,500 shares of common stock (14.99%)
(6) Payment date April 6, 2010

(2) Details of Business Alliance
MITSUI and MODEC regard each other as strategic partners, and will jointly promote business relating to floating production systems for oil and gas fields by each utilizing the management resources, know-how, brands, customer base etc. of both companies.
Followings are the details of the business alliance, and it is assumed that further details, terms and conditions, timing and other matters regarding the business alliance will be established through mutual consultations.

  • Provision, by MODEC, of the know-how as to the engineering, construction, lease and operation, etc. of floating production systems.
  • Provision, by MITSUI, of its global network, and of know-how as to business development, financing and characteristics of each region.
  • Assitance, by MITSUI, in enhancing MODEC's system relating concerning business operation.
  • Support, by MITSUI, with respect to the human resources of MODEC.

MITSUI has been dispatching a director to MODEC and intends to continue to dispatch a director to MODEC after the business alliance has been formed.

3. Outline of MODEC

Please scroll horizontally to look at table below.

(1) Company name MODEC Inc.
(2) Location of head office 2-1 Kasumigaseki 3-chome, Chiyoda-ku, Tokyo
(3) Title and name of representative Kenji Yamada, Chairman and Chief Executive Officer
(4) Main business Engineering, construction, installation, sale, charter and operation of floating production systems such as Floating Production, Storage and Offloading systems (FPSO)
(5) Capital
(as of December 31, 2009)
12.4 billion yen
(6) Establishment date June 1, 1987
(7) Sales 204.2 billion yen
(fiscal year ended December 31, 2009)
(8) End of fiscal year December 31
(9) Stock listing Tokyo Stock Exchange Group, Inc.
(10) Total number of shares outstanding
(as of December 31, 2009)
37,408,000 shares
(11) Major shareholders and shareholding ratio
(as of June 30, 2009)
Mitsui Engineering & Shipbuilding Co., Ltd. 50.11%
MITSUI & CO., LTD. 6.59%
Japan Trustee Services Bank, Ltd. (Trust Account 4G) 3.18%
DnB NOR Bank ASA 2.68%
Japan Trustee Services Bank, Ltd. (Trust Account) 2.22%
Trust & Custody Services Bank, Ltd. (Pension Trust Account) 1.78%
The Master Trust Bank of Japan, Ltd. (Trust Account) 1.65%
The Chase Manhattan Bank, NA London SL Omnibus Account 1.25%
Euroclear Bank SA/NV 1.21%
Sojitz Corporation 1.15%
(12) Relationship between MITSUI and MODEC
(as of December 31, 2009)
Capital relationship MITSUI holds 2,466,500 shares (6.59%) of MODEC.
Personnel relationship MITSUI is currently dispathing 1 director and 2 employees to MODEC.
Business relationship MITSUI has been making investments etc. jointly with MODEC to the special purpose companies for the purpose of owning floating production systems for oil and gas fields development promoted by MODEC.
(13) Operating results and financial condition of MODEC (consolidated) for the last 3 years
Fiscal year Ended December 31, 2006 Ended December 31, 2007 Ended December 31, 2008
Consolidated net assets
(thousand yen)
42,222,475 48,031,835 40,678,209
Consolidated total assets
(thousand yen)
123,350,252 133,734,152 142,115,556
Consolidated net assets per share
(yen)
1,092.01 1,153.39 993.70
Consolidated sales
(thousand yen)
99,149,334 144,040,900 143,669,121
Consolidated operating profit
(thousand yen)
3,494,404 6,959,924 1,973,827
Consolidated ordinary profit
(thousand yen)
4,664,105 7,828,915 2,529,415
Consolidated net income
(thousand yen)
3,305,748 4,499,328 1,357,782
Consolidated net income per share
(yen)
88.37 120.28 36.30
Dividend per share
(interim dividend per share)
(yen)
12.50
(6.25)
15.00
(7.50)
17.50
(8.75)

4. Schedule

(1) Execution date of the business alliance agreement and share subscription agreement : February 26, 2010

(2) Payment date : April 6, 2010

5. Future Prospects

The impact on MITSUI's business in the current fiscal year of the subscription for shares of MODEC through the Third Party Allotment and the business alliance with MODEC will be insignificant.

Notice:
This press release includes forward-looking statements about Mitsui. These forward-looking statements are based on the current assumptions and beliefs of Mitsui in light of the information currently available to it, and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause Mitsui's actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. The risks, uncertainties and other factors referred to above include, but are not limited to, those contained in Mitsui's latest annual report on Form 20-F, which has been filed with the U.S. Securities and Exchange Commission.
This press release is published in order to publicly announce specific facts stated above, and does not constitute a solicitation of investments or any similar act inside or outside of Japan, regarding the shares, bonds or other securities issued by us.

Information

For inquiries on this matter, please contact

Mitsui & Co., Ltd.
Investor Relations Division
Telephone: +81-3-3285-7910
Facsimile: +81-3-3285-9819
infoTKADZ@mitsui.com
Mitsui & Co., Ltd.
Corporate Communications Division
Takatsugu Ohki
Telephone: +81-3-3285-7562
Facsimile: +81-3-3285-9819