LINE Corporation (NYSE:LN) (TOKYO:3938) (Headquarters:
Shinjuku-ku, Tokyo, Japan; Representative Director and CEO: Takeshi
Idezawa; the “Company”) announced that the Company has decided at
the board of directors meeting held today to establish a new
wholly-owned subsidiary, LINE Digital Frontier Corporation (the
“New Company”), by a simplified incorporation-type company split to
succeed the Company’s LINE Manga and LINE Comics businesses (the
“Split”).
Since this is a simplified incorporation-type company split
solely involving the Company, certain information is omitted from
this announcement.
1. Purpose of the Company Split
The LINE Manga business operated by the LINE Group provides
users in Japan and Taiwan with a smartphone-based digital comic
service that allows them to purchase and read manga and novellas on
their mobile devices. Further, the LINE Group has been publishing
popular, LINE Manga-exclusive titles as comics and selling them at
book stores across Japan since 2015.
In order to further expand the LINE Manga and LINE Comics
businesses in Japan and abroad, the Company has decided to convert
these businesses into a wholly-owned subsidiary by means of a
company split. Through these means, the Company aims to make these
businesses more competitive and improve the corporate value of the
entire LINE Group by clarifying the management responsibilities for
the business as an independent company, as well as accelerating the
decision-making process and creating a business that can operate
flexibly.
2. Summary of the Company Split
(1) Company Split Schedule
Date of approval of the incorporation-type
company split plan: May 25, 2018
Date of the company split (effective date):
July 2, 2018 (scheduled)
Note: The Split will be performed without the approval of
the general shareholders’ meeting as it fulfills the requirements
for a simplified split per Article 805 of the Companies Act.
(2) Method of the Company Split
The method of the contemplated company split is a simplified
incorporation-type company split, with the Company as the company
to be split and the New Company as the newly established
company.
(3) Allotment of Shares Related to the Company Split
The New Company will issue 7,000 shares of stock to the Company
upon completion of the Split.
(4) Treatment of Stock Acquisition Rights and Bonds with Stock
Acquisition Rights of the Splitting Company
There will be no changes to the treatment of stock acquisition
rights issued by the Company upon completion of the Split.
(5) Change in Capital Upon Company Split
There will be no change in capital of the Company upon
completion of the Split.
(6) Rights and Obligations to be Succeeded to the New
Company
The New Company will succeed to certain rights and obligations
for assets, liabilities, and contractual commitments (including any
rights and works ancillary thereto) pertaining to the LINE Manga
and LINE Comics businesses (excluding businesses regarding prepaid
instruments used in its businesses).
(7) Expectation of the Fulfillment of the Company’s
Obligations
The Company and New Company expect that there will be no issues
as to the certainty of fulfilling their respective obligations upon
completion of the Split.
3. Overview of Companies Involved in the
Company Split
Splitting Company(as of March 31,
2018)
Formed and Successor Company(planned to be
established on July 2, 2018)
(1) Name LINE Corporation LINE Digital Frontier Corporation (2)
Location 4-1-6 Shinjuku, Shinjuku-ku, Tokyo 4-1-6 Shinjuku,
Shinjuku-ku, Tokyo (3) Name and title of representative
Takeshi Idezawa,Representative Director
and CEO
Takeshi Idezawa,Representative Director
and CEO
(4) Business Operation of its Core Business (including advertising
services, sticker sales, and game services) and Strategic Business
(including FinTech, AI, and commerce services), both of which
operate on the foundation provided by LINE mobile messaging app.
Operation of digital comic service (5) Capital 92,729 million yen
100 million yen (tentative) (6) Date of establishment September 4,
2000 July 2, 2018 (tentative) (7) Total number of issued shares
238,785,310 shares 7,000 shares (tentative) (8) Fiscal year end
December 31 December 31 (9) Major shareholders and ownership
percentage(as of December 31, 2017)
NAVER Corporation: 73.37%Moxley & Co.
LLC: 4.01%Jungho Shin: 1.99%
LINE Corporation: 100% (10) Operating results and financial
position of company subject to split for the latest fiscal year
(consolidated) (Unless otherwise specified, the table is shown in
units of million yen) Fiscal year December 2017 Net assets
attributable to owners of the parent 185,075 Total assets 303,439
Net assets per share (yen) 779.30 Revenues 167,147 Operating profit
25,078 Profit before tax from continuing operations 18,145 Profit
for the year attributable to owners of the parent 8,078
Basic profit per share (yen) 36.56 Note 1:
Consolidated financial statements are prepared in accordance with
International Financial Reporting Standards (“IFRS”). 2: Total
number of issued shares increased by 1,172,332 shares due to third
party allotment of new shares on April 25, 2018.
(11) Outline of Business Division to be Split
(i) Business of Division to be Split
Operation of businesses related to the LINE Manga digital comic
service and LINE Comics.
(ii) Operating Results of Business Division to be Split
Revenue for the year ended December 2017: 1,777,878,942 yen
(3) Items and Book Values of Assets and
Liabilities to be Split (As of March 31, 2018)
Asset Liability Item
Book value(thousand yen)
Item
Book value(thousand yen)
Current assets 1,384,435 Current liabilities 809,978 Fixed assets
164,559 Fixed liabilities 711 Total 1,548,994 Total
810,689 Note: Final figures for the
assets/liabilities to be split will be determined by adjustment of
increases and decreases accrued up to the effective date of the
Split.
4. Status after the Company Split
There will be no changes to the Company’s name, location, name
and title of representative, business, capital and fiscal year-end
upon the completion of the Split.
5. Future Projections
This Split will have no effect on the Company’s consolidated
earnings.
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version on businesswire.com: https://www.businesswire.com/news/home/20180525005740/en/
LINE CorporationMichiko Setsu, +81-3 4316 2104Global
PRdl_gpr@linecorp.co