ETIC to Provide Support to Fuji Technica Inc. and related company
September 17th, 2010
Enterprise Turnaround Initiative Corporation of JapanThe Enterprise Turnaround Initiative Corporation of Japan (“ETIC”) has decided to provide
support to Fuji Technica Inc. and a related company under Article 25, Clause 4 of theEnterprise Turnaround Initiative Corporation of Japan Act (Act 63, of 2009, hereafter “theETIC Act”).
1. Name(s) of persons or companies concerned
Fuji Technica Inc. (hereafter, “Fuji Technica”) and Fuji Assembly Systems, Inc.
(hereafter “FAS”); collectively, “the Fuji Technica companies”
2. Name(s) of financial institutions jointly applying for rehabilitation support with the Fuji
Technica companies
The Shizuoka Bank, Ltd. (hereafter “Shizuoka Bank”)
3. Outline of business revitalization plan
Please see appendix
4. Comments from State Ministers in charge of ETIC
Prime Minister, Minister of Internal Affairs and Communications, Minister of Finance,
Minister of Economy, Trade and Industry: No opinion expressed
Minister of Health, Labour and Welfare: ““I have no objection to the decision to support
Fuji Technica and FAS. However, I ask that after reaching the decision to support, ETIC
should encourage the Fuji Technica companies to discuss the situation with employeesof the companies as soon as possible. I also ask that in advising on and guiding theimplementation of the corporate revitalization plan, ETIC should aim to ensure that the
Fuji Technica companies comply with related laws and regulations, and that they also
provide adequate opportunities for substantive discussions with the workforce with due
consideration of employment stability and other such factors.”
5. Comment from State Minister supervising business activities
Minister of Economy, Trade and Industry: “The domestic die making industry is facing
significant changes in the operating environment, including a substantial fall in orders1since the onset of the global recession and shifts in the demand structure accompanying
the rapid development of Asia’s manufacturing industry. I therefore believe that thebusiness integration of two of Japan’s major die making companies is a significant
undertaking. I hope that through steady progress in the business revitalization plan wewill see the creation of a cost structure able to compete with developing nations while
maintaining Japan’s outstanding product quality and delivery management capabilities,
with a sustainable employment foundation.”
6. Debt purchase application period
From Friday, September 17th, 2010 for receipt by ETIC no later than Wednesday,
November 10th, 2010
7. Request for temporary suspension
Under Article 27, Clause 1 of the ETIC Act, financial institutions have been requested not
to recover loans or exercise any other rights they may have as creditors before the end of
the debt purchase period as per item 6 above.
8. Treatment of trade and general creditors
The decision by ETIC to provide support involves requesting financial support only fromfinancial institutions providing loans to the Fuji Technica companies. No request for
support will be made with regard to trade debt. Therefore there will be no impact on
trade and general creditors.
9. Basis for decision to support
ETIC’s basis for deciding to provide support is as follows.

9.1 Rationale
Fuji Technica operates on a global scale with a strong client base in Japan andworldwide (in excess of 110 clients in 19 countries), providing world class technology
in automotive stamping dies and serving as a primary production support for the
global automotive industry. The company also maintains strong brand power derived
from more than 50 years of technical development and its global client base. As arepresentative Japanese die maker, Fuji Technica has contributed to the developmentof the automotive industry in a broad range of regions, from the advanced to theemerging nations.
2Furthermore, given that dies are a fundamental element of manufacturing, Fuji
Technica’s technological capabilities also contribute to the maintenance andenhancement of competitive strength in the Japanese domestic manufacturingindustry.
One of the major themes of this business revitalization plan is a merger with Miyazu
Seisakusho Co., Ltd. (hereafter, “Miyazu Seisakusho”), a major domestic die
manufacturer.
It is hoped that this plan, by having ETIC play a catalytic role in the reorganization of
an industry in a sector that has been exposed to global competition, will help theindustry extricate itself from low profitability brought on by a structural oversupply fromdomestic manufacturers, and will provide an opportunity for further industrial
reorganization in the future. ETIC believes that this plan can be a test case for otherindustry sectors that face the same issues.
The collapse of Fuji Technica would damage the businesses of many of its clients (FujiTechnica had 32 ongoing projects as of August 15th 2010, while FAS had 37,) as wellas business partners (Fuji Technica has in excess of 450 clients, while FAS has morethan 206,) and ETIC expects that employees (a total of 586 at the target businesses
as of July 31st) would lose their livelihoods.
If the company were to fail, there would be ramifications for the local economies inwhich its businesses are located, and the production plans of automotive
manufacturers around the world would be exposed to considerable uncertainty. The
effects of the failure of the company on social and economic systems overall are too
great to be ignored. Accordingly, ETIC has determined that it is important to support
Miyazu Seisakusho so that its business can continue operating.
9.2 Role of ETIC
Under the terms of this plan, ETIC will:
1. Act as a coordinator among the financial institutions and others that are involved
with Fuji Technica
 ETIC’s aim is to resolve the excessive interest-bearing debt burden on thebusiness and strengthen its financial position by requesting debt forgiveness3

from financial institutions, as outlined below
2. Coordinate the parties who have an interest in the business integration between
Fuji Technica and Miyazu Seisakusho.
 ETIC’s role will be to facilitate optimal coordination between the parties to theintegration
3. Inject capital of ¥5.3 billion
 ETIC will underwrite a ¥5.3 billion issuance of new preferred shares,
providing funding for payments associated with the business transfer ofMiyazu Seisakusho and for structural reform.
4. Provide a maximum of ¥1.5 billion in loan guarantees
 ETIC will facilitate funding procurement by guaranteeing approximately 50%
of a maximum of ¥3.0 billion in working capital funding to be provided by
Shizuoka Bank and others
5. Deploy management personnel and other such resources to support managementof the company.
 ETIC, subsequent to the capital injection outlined in 3. above, will deploy
management and other personnel into the company to support theimplementation of the business revitalization plan.

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Appendix: Outline of the Business Revitalization Plan
Section 1: Overview of the companies receiving support (all information as of July 31st,
2010 unless otherwise stated)

1. Fuji Technica Inc.
1.1 Name of company
Fuji Technica Inc.
1.2 Head office
20 Matoba, Shimizu-cho, Sunto-gun, Shizuoka Prefecture
1.3 Date of establishment
February 6, 1957
1.4 Capital¥910,174,967
1.5 Shares
Number of shares authorized:

29,000,000 shares

Number of shares issued and outstanding:

8,043,418 shares

1.6 Main shareholders(As of March 31, 2010)
Name of shareholder

Number of shares held
(thousand shares)

Lotus Trading

Percentage of total

1,040

12.92

Toshio Takahashi

683

8.49

Komatsu Ltd.

643

7.99

Ohchu Co., Ltd.

495

6.15

The Shizuoka Bank, Ltd.

273

3.40

Takako Takahashi

266

3.30

Midori Takahashi

263

3.27

Mizuho Trust & Banking Co., Ltd. Retirement
Pension Trust (Mizuho Bank account) mandate with
Trust & Custody Services Bank, Ltd.

252

3.13

Kasumi Takahashi

196

2.44

Fuji Technica Employees Share Club

155

1.93

Other

3,777

46.98

Total

8,043

100.00

1.7 Main business
Automotive stamping tool and die operations
1.8 Number of employees
441 (of which, 7 part-time and 1 on placement)51.9 Main facility locations
Head office and Mishima plant: Shimizu-cho, Sunto-gun, Shizuoka Prefecture
Izu-Nagaoka plant: Izunokuni-shi, Shizuoka Prefecture
Niigata plant (warehouse): Nishikanbara-gun, Yahiko Mura, Niigata Prefecture
1.10 Main banks
The Shizuoka Bank; The Bank of Tokyo-Mitsubishi UFJ, Ltd; The Juroku Bank,
Ltd.; others
1.11 Affiliated companies
FAS; Fuji Technica Service Inc.; Yantai Fuji Wilson Engineering Co., Ltd.;
Yantai Fuji Mitsui Automotive Die & Parts Co., Ltd.; PT Fuji Technica Indonesia;
IBE Co., Ltd.
1.12 Financial overview (financial results for the year ended March 31, 2010)
Consolidated results:
Net sales¥15,832,520,000

Gross profit¥1,240,400,000

Operating income¥396,110,000

Ordinary income¥257,770,000

Net income¥299,830,000

Net assets¥533,060,000

Total assets¥18,688,410,000

Non-consolidated results:
Net sales¥12,483,080,000

Gross profit¥818,910,000

Operating income¥236,030,000

Ordinary income¥8,390,000

Net income¥49,140,000

Net assets¥301,940,000

Total assets¥15,321,380,000

2. FAS
1.1 Name of company
Fuji Assembly Systems Inc.
1.2 Head office6

Shin-Hasama 71, Seki-shi, Gifu Prefecture
1.3 Date of establishment
July 11, 2000
1.4 Capital¥60,000,000
1.5 Shares
Number of shares authorized:

4,800 shares

Number of shares issued and outstanding:

1,200 shares

1.6 Main shareholders
Name of shareholder

Number of shares
held (shares)

Percentage of total

1,000

83.33

Hiroshi Watanabe

100

8.33

Other

100

8.34

Total

1,200

100.00Fuji Technica

1.7 Main business
Automotive welding equipment operations
1.8 Number of employees
145 (of which, 2 part-time, 9 on placement, 6 temps)
1.9 Main facility locations
Head office, Seki plant: Seki-shi, Gifu Prefecture
Kani plant: Kani-shi, Gifu Prefecture
1.10 Main banks
Juroko Bank; The Bank of Tokyo-Mitsubishi UFJ, Ltd.; The Gifu Shinkin Bank;others1.11 Financial overview (financial results for the year ended March 31, 2010)
Net sales¥3,388,030,000

Gross profit¥286,530,000

Operating income¥35,750,000

Ordinary income¥30,190,000

Net income¥30,140,000

Net assets¥2,080,000

Total assets¥3,704,150,000

7Section 2: Background and circumstances leading to request for ETIC support
As a major maker of large automobile stamping dies, Fuji Technica maintains brand power
and a solid domestic and international client base supported by high technical capabilities.
Nevertheless, in the face of the cost competitiveness of new metal die-makers in the Asian
region, particularly in South Korea and China, since 2000 Japanese domestic metal
die-makers—including Fuji Technica—have lost the price war and have been forced toretreat into the area of high-precision dies where they can take advantage of their technicalsuperiority but where profit margins are slim. The same circumstances have forced FSA into
the high precision area.
As a result of excessive competition in the high-precision die sector, the Japanese domestic
die-making industry has fallen into a vicious cycle where it is having difficulty generating
sufficient levels of cash flow and is running low on the funding needed for investment toensure future competitiveness.
In response, Fuji Technica in 2009 implemented restructuring which included closing its
Niigata plant, cutting directors’ remuneration, and reducing personnel and salaries, and on
September 28th of the same year, the company received business reconstruction planning(hereafter, “the business reconstruction plan”) accreditation based on the Law on Special
Measures for Industrial Revitalization, and procured finance using the debt guarantee
system of the Organization for Small & Medium Enterprises and Regional Innovation.
Fuji Technica has made efforts to improve productivity based on the business reconstruction
plan, and some results are being seen. However, in addition to the unexpected appreciationof the yen, there have been sharp changes in the external environment, including a
prolonged dip in orders as a result of the economic slump and increasingly severe pricecompetition. These changes have had a considerable impact, and in order to overcome thissituation and further develop business, more effective and drastic reforms are needed. Fuji
Technica’s capital adequacy ratio has fallen to 1.5 percent (based on the annual security
report for the year ending March 2010 for Fuji Technica on a non-consolidated basis,) andthis has also had an impact on order activity.
In order to overcome the prevailing situation, Fuji Technica recently reached agreement with
Miyazu Seisakusho, a major domestic competitor from the same industry, on a businessmerger.
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The Fuji Technica companies, following discussions with their main bank Shizuoka Bank,
have concluded a “Memorandum of Understanding for Business Integration” (hereafter,“Memorandum of Understanding”) with Miyazu Seisakusho, and applied to ETIC for
revitalization support so as to achieve business revitalization based on a transparent andfair process, while minimizing impairment of business value and pursuing a swift merger
completion.

Section 3: Outline of business revitalization plan
1. Basic policy
The main components of this business revitalization plan call for Fuji Technica toreceive assistance from ETIC and receive the entire business of Miyazu Seisakusho,
regarded as one of the “Big Three” companies in the large press metal-die industry
alongside Fuji Technica, with Fuji Technica taking over the business of the merging
companies and pursuing business revitalization.
Fuji Technica and Miyazu Seisakusho have been in friendly competition over the past
several decades in the large press metal-die industry, and both have established theirbrands and their customer bases globally based on strong technical foundations. The
Fuji Technica companies have enhanced competitiveness and differentiation byextending their activities from large stamping dies to also include operations related toautomobile body stamping, encompassing adjacent operations on the value chain suchas welding equipment and automobile component stamping.
Nevertheless, as mentioned earlier, the rapid rise of metal-die manufacturers inemerging nations and the reduction in the number of new car models due to the effectsof the global recession have made the business environments for both companies
suddenly much more difficult, and the futile war of attrition amongst the Japanesedie-makers has put both companies at risk of losing the advantages that they havedeveloped.
In order to resolve the current situation, the companies have chosen to try to restore
their innate competitiveness through the integration of their operations.
There are three essential points to this business revitalization plan.
(1) Withdrawing from the wasteful war of attrition with fellow domestic die-makers in9the high-precision die sector in which Japanese companies are internationallycompetitive(2) Creating greater cost competitiveness by strengthening manufacturing plants inthe emerging nations(3) Building competitive superiority through the combination of product quality control
and delivery management skills that both companies possess, together with theenhanced cost competitiveness in (2) above.
2. Business plan
To realize these three essential points, Fuji Technica and Miyazu Seisakusho will
integrate their businesses so that both can gain the greatest possible benefit from eachother’s strengths, supplement each other's scarce management resources, ease thedomestic oversupply of metal dies, and aim for sustainable increases incompetitiveness.
The business plan of the integrated company can be summarized as follows.
(1) Reform to change the business structure(1) Reduce domestic supply capacity and promote selective acceptance of orders(in the large high-precision die sector)(2) Increase orders through manufacturing bases in emerging nations (in sectors
other than large high-precision dies)(3) Strengthen the order base(2) Reform to achieve cost reductions(1) Strengthen profit management and cost management systems(2) Streamline head office functions(3) Streamline the FAS welding equipment business(3) Reform of organizational management and personnel policies
Use the reform of organizational management and personnel policies, which willaccompany the business integration, as a lever to achieve a thorough change inbusiness structure (solve excessive competition resulting from the structural
oversupply, achieve greater cost competitiveness by strengthening manufacturing
plants in the emerging nations, strengthen financial footing to help secure moreorders), and build up incremental, steady cost reductions to help the company
shed its current low-profit structure.

103. Business restructuring
On the September 17th 2010, Miyazu Seisakusho and Fuji Technica concluded aMemorandum of Understanding. Following completion of the business integration
contract, in late December 2010 Miyazu Seisakusho will transfer its entire business to
Fuji Technica ("the business transfer") and the operations of the companies will be
integrated.
Funding for payments associated with the business transfer of Miyazu Seisakusho andfor structural reform implemented under the business revitalization plan will be procured
through a third party allocation of shares underwritten by ETIC.
4. Request for financial support
With respect to approximately ¥3.1 billion of the total debt owed to creditors, Fuji
Technica will implement a third party share subscription through investment-in-kind by
the relevant creditors (a so-called Debt-Equity Swap, hereafter referred to as DES,).
With respect to approximately ¥1.2 billion of debt, Fuji Technica will request a change inloan terms to subordinated loan capital (a so-called Debt-Debt Swap.)
With respect to FAS, the issue of excessive debt shall effectively be eliminated througha process of aggregating debt pertaining to FAS in Fuji Technica, with Fuji Technica
underwriting the discharged debt.
5. Financing
ETIC believes that the financial support set forth in this business revitalization plan,
along with the capital injection from ETIC and the facility to procure working capital from
Shizuoka Bank, will ensure that there will be no risk of Fuji Technica becoming short offunds.
6. Conformance with standards for support
1. Possession of effective management resources
Fuji Technica is a one of the world’s leading manufacturers of large press dies used forhigh precision stamping in the automotive industry, capable of short delivery cycles
from design through to production. The company has 50 years of accumulated
experience and technical development, and has a strong customer base and brand11

presence, particularly in the area of high precision press dies for body side panels andfenders. The Fuji Technica companies have also enhanced competitiveness anddifferentiation by extending their activities from large stamping dies to also include
operations related to automobile body stamping, encompassing adjacent operations on
the value chain such as welding equipment and automobile component stamping.
FAS, meanwhile, is one of the world’s leading high precision automobile welding line
equipment companies, with sophisticated planning and construction capabilities, astrong brand and solid customer base developed since its founding
Accordingly, both companies are repositories of effective management resources.
2. Standards for productivity improvement
The Fuji Technica companies are expected to be able to meet productivity
improvement standards within three years of the date of ETIC’s decision to provide
support.
3. Standards for financial soundness
The Fuji Technica companies expected to be able to meet standards for financial
soundness within three years of the date of ETIC’s decision to provide support.
4. Potential to refinance within three years
Implementation of the business revitalization plan is expected to significantly improve
the financial condition of the Fuji Technica companies, enabling them to reach suitablelevels of capital repayment and interest payment capacity, and making refinancing
highly possible.
5. Connection with structural oversupply
Implementation of the business revitalization plan will lead to the business integration
and rationalization of Fuji Technica and Miyazu Seisakusho, contributing to a
reduction in structural oversupply.
Accordingly, the plan has been judged as ‘not hindering the resolution of structural
oversupply’ with reference to Article 19 of the Act on Special Measures for Industrial
Revitalization and Industrial Innovation.

126. Status of consultations with workforce
While Fuji Technica has no associated labor union, it is planned that meetings with
employees will be scheduled promptly after announcement of the decision to provide
support, and opportunities provided to discuss employment conditions and otheraspects of the business revitalization plan.
At FAS, it is planned that meetings with the labor union will be scheduled promptly
after announcement of the decision to provide support to discuss employment
conditions and other aspects of the business revitalization plan.

Section 4: Responsibility of managers
1. Fuji Technica
The responsibility of the management team of Fuji Technica will be reflected in the
resignation of all current directors and auditors, other than outside directors andauditors, without directors’ retirement benefits.
2. FAS
The responsibility of the management team of FAS will be reflected in the resignation inprinciple of all current directors and auditors, without directors’ retirement benefits.

Section 5: Responsibility of investors
1. Fuji Technica
The responsibility of shareholders will be reflected in the significant dilution of their
existing shareholdings that is expected to arise as a result of new shares issued to
ETIC on its ¥5.3 billion capital injection along with the planned ¥3.1 billion DES
implemented with creditors of the company.
2. FAS
The responsibility of shareholders will be reflected in the significant dilution of their
existing shareholdings that is expected to arise as a result of Fuji Technica making acapital injection into FAS through using the investment-in-kind and other methods toaggregate FAS debt in Fuji Technica.
ENDS
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