Management and Finance

Regarding capital increase at Meidensha’s Chinese subsidiary

2019-05-31

Meidensha Corporation (Meiden) decided to increase the capital of Meiden Hangzhou Drive Technology Co., Ltd., a wholly owned subsidiary in China, at a board of directors meeting held on May 31, 2019. Details of the increase are as follows.

1. Capital increase purpose and background

Meiden has positioned motors and other components for electric vehicles (EVs) as a pillar of its growth businesses in the Medium-Term Management Plan 2020. Demand for these vehicles is expected to increase due to the global trend toward environmental protection and more stringent environmental regulations.

The capital increase follows Meiden’s announcement last July it would spend a total of ￥7 billion in EV business-related capital investment at three domestic plants. The latest investment is aimed at establishing the company’s first overseas production hub for EV-related products by injecting ￥4.1 billion into Meiden Hangzhou Drive Technology, which it set up with capital of ￥150 million in China – the world’s largest automobile market.

2. Outline of the subsidiary

1. Name	Meiden Hangzhou Drive Technology Co., Ltd.
2. Address	No.477, Hongxing Road, Qiaonan District, Xiaoshan Economic & Technological Development Zone, Hangzhou, Zhejiang, China
3. Chairman & general manager	Masahiko Satoh
4. Business operations	Production and sale of motors and inverters for electric vehicles and plug-in hybrid electric vehicles
5. Capital	￥150 million (before the capital increase)
6. Date of establishment	May 16, 2019
7. Capital provider	100% by Meidensha Corporation
8. Relationships with Meiden	Capital relationship: Wholly owned subsidiary Personnel relationship: Chairman and General Manager Masahiko Satoh dispatched to the subsidiary from Meiden Business relationship: Undecided

3. Outline of the capital increase

1) Amount                             ￥4.1 billion
2) Capital after the increase     ￥4.25 billion
3) Investor                             Meidensha Corporation
4) Payment date                     Undecided

4. Schedules and products to be manufactured

1. Date of endorsement by board of directors	May 31, 2019
2. Start of factory construction	Scheduled for November 2019
3. Completion of factory construction	Scheduled for July 2020
4. Start of operations at the factory	Scheduled for March 2021
5. Products to be manufactured	Motors for EVs
6. Maximum production capacity	170,000 units annually

5. Future prospects

The impact of this capital increase on Meiden’s consolidated business performance will be minor. Meiden will swiftly report any development if doing so is deemed necessary.

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