Notice of Decision to Provide Support to WILLCOM
thMarch 12 2010
Enterprise Turnaround Initiative Corporation of JapanThe Enterprise Turnaround Initiative Corporation of Japan (hereafter, “ETIC”) has decided toprovide support to the company listed below in accordance with Article 25.4 of the Enterprise
Turnaround Initiative Corporation of Japan Act (Act No. 63 of 2009, hereafter, “the ETIC Act”).
1 Name of Person or Company Receiving Support
WILLCOM, Inc. (hereafter, “Willcom”)
2 Name of Financial Institutions Jointly Applying for Support with Willcom
The Bank of Tokyo-Mitsubishi UFJ, Ltd. and Mizuho Corporate Bank, Ltd.
3 Outline of the Business Revitalization Plan
See Attachment
4 Opinions of Principal State Ministers
Prime Minister: No particular opinion
Minister of Finance: No particular opinion
Minister of Internal Affairs and Communications: Kindly see item 5 below
Minister of Health, Labour and Welfare: No objection. However, the Minister requests thatETIC should guide Willcom to consult employees immediately after ETIC’s decision to provide
support and that ETIC pays sufficient care and attention to compliance with relevant laws andregulations and to the aforementioned consultations with employees.
Minister of Economy, Trade and Industry: No particular opinion
5 Opinion of State Ministers Supervising Business Activities
Minister of Internal Affairs and Communications: No objection to the decision to provide
support in this case. The Personal Handy-phone System (PHS) provided by Willcom has
more than 4 million subscribers and the service plays an important role in facilitating
communication at medical institutions and other organizations, as well as in times ofemergency, such as the earthquakes, the fires, etc. Therefore, we request that attention ispaid to securing the continuation of stable services.
6 Debt Purchase Application Period*thth(March 12 2010 to May 12 2010 (receipt by ETIC))* In this case ETIC does not purchase debt, so the “Debt Purchase Application Period” refers
to the period for agreement to manage or dispose of debt in accordance with the Business
Revitalization Plan (Article 26.1.2 of the ETIC Act).
7 Request for Temporary Suspension
thAs Willcom filed a petition with the Tokyo District Court on February 18 2010 to commenceth
corporate reorganization procedures, and received approval to do so on March 12 2010, norequest for a temporary suspension will be made under Article 27.1 of the ETIC Act.

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8 Handling of General Debt
In this case Willcom filed a petition with the Tokyo District Court to commence legal
reorganization procedures in conjunction with its application for ETIC support.
To preserve the company’s business value in order to allow it to continue business operations,as per the decision of the court, business creditors holding debts amounting to up toth
¥2.5billion for business transactions conducted through February 17 2010, will be paid asper prior arrangements.
thFor debts for business transactions conducted from February 18 2010, the full amount willbe treated as common benefit claims.
9 ETIC’s Rationale for Deciding to Provide Support
ETIC’s rationale for deciding to provide support is as follows:
9.1 The Significance of ETIC Support
Willcom’s principal business, the Personal Handy-phone System (PHS), is an importantmeans of communication in each regional area. The service helps support the everyday
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lives of approximately 4.26 million subscribers (as of the end of February 2010), and isan indispensable part of the social infrastructure for medical services, nursing care, anddisaster prevention. The PHS service features low electromagnetic radiation andefficient power consumption, and due to the reduced risk of causing malfunction of
medical devices from electromagnetic waves, is used at approximately 5,000 medical
institutions, and by 60,000 medical professionals. It is particularly widely used at medical
facilities with above a certain number of beds and also at facilities providing emergency
medical services. There are approximately 160,000 base-stations throughout Japan,
part of a far-reaching network constructed to be able to withstand the collapse of certain
base-stations or power outages in times of disaster, making it an important means ofcommunication in times of emergency.
If Willcom’s business operations were to collapse, and these social infrastructure
networks were no longer maintained, it would affect not only the everyday lives ofnumerous users, but would cause significant turmoil for medical and nursing carepersonnel, and have an impact on disaster prevention. A considerable impact could also
be expected on regional economies, as well as the company’s numerous business
partners and over 1,000 employees and temporary workers.
Willcom’s eXtended Global Platform (XGP) business is a next-generation high-speed
data transfer service that displays significant potential for the future, but that will requireconsiderable capital expenditure, which will be difficult for the company to provide. TheXGP service will therefore be transferred from Willcom and developed by awell-resourced sponsor that will make the necessary capital investment. The XGP
network is to be utilized by Willcom through a Mobile Virtual Network Operator (MVNO)
when necessary.
9.2 Role of ETICIn this case ETIC will provide support to Willcom principally through coordination of theparties concerned, and will not purchase debt or invest in Willcom. Coordination ofvarious stakeholder interests has been difficult for the parties concerned to manage on
their own, but because ETIC’s position is impartial and neutral towards the interests ofstakeholders including financial institutions, sponsors, Willcom, shareholders and otherconcerned parties, this will allow for a smooth start to the business revitalization
process.

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Including 3G subscribers (approximately 90,000)

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ETIC will give consideration to financing from financial institutions or otherorganizations, and plans to conduct business revitalization utilizing private sector
fundings. In the event that ETIC should be required to providing financing, it plans tosecure sufficient collateral from installment receivables and other assets of Willcom toallow it to be certain of recovering its funding.
thOn February 18 2010, Willcom filed a petition with the Tokyo District Court tocommence legal reorganization procedures in conjunction with its application for ETICsupport. ETIC expects that in the procedures for this case, the measures outlined inSection 3 of the Attachment, including the reimbursement of commercial obligations upto ¥2.5billion, will support the revitalization of Willcom.
– End –

3Attachment
Outline of the Business Revitalization Plan
Section 1: Overview of the Company Receiving Support
1 Corporate Outline
1.1 Company Receiving Support
WILLCOM, Inc. (hereafter, “Willcom”)
1.2 Head Office Location
3-4-7 Toranomon, Minato-ku, Tokyo
1.3 Date of Establishment
thOctober 9 1990
1.4 Capitalization¥5.0 billion
1.5 StockTotal shares authorized to issue:
5,000,000 shares
Of which, total shares issued outstanding:
1,186,890 shares
1.6 Business Operations
Telecommunications and related businesses1.7 Number of Employees
stRegular employees: 1,058; Non-regular employees: 274 (as of January 31 2010)
1.8 Principal Business Offices
Hokkaido Branch Office; Tohoku Branch Office; Kita-kanto Branch Office; Minami-kanto
Branch Office; Tokai Branch Office; Kansai Branch Office; Chushikoku Branch Office;
Kyushu Branch Office
1.9 Principal Banks
The Bank of Tokyo-Mitsubishi UFJ, Ltd., Mizuho Corporate Bank, Ltd., others
1.10 Affiliates
WILLCOM OKINAWA, Inc. (Located in Naha-shi, Okinawa Prefecture. Willcom holds
80% of the shares)st
1.11 Financial Position (as of March 31 2009)
Consolidated:
Operating revenues¥203,038 million
Operating income¥8,974 million
Recurring profit¥6,617 million
Net assets¥25,398 million
Total assets¥199,217 million
Non- consolidated:

Operating revenues
Operating income
Recurring profit
Net assets
Total assets¥202,507 million¥8,755 million¥6,401 million¥25,103 million¥198,991 million

Section 2: Background and Circumstances Leading to the Request for Corporate
Reorganization and ETIC Support
Willcom, in order to refinance the acquisition funding loan it received at the time of aleveraged buyout (LBO), in June 2005 raised ¥35.0 billion though a public offering ofcorporate bond, and in June 2006 received ¥120.0 billion in financing (syndicated loan) fromthe financial institutions. However, from around 2007 competition intensified and new
subscriptions and handset sales declined. At the same time, Willcom incurred an increase incapital expenditure and other liabilities related to the commercialization of its eXtended Global
Platform (XGP) next-generation high-speed data transfer service, straining its financial
position. Under these circumstances, Willcom in September 2009 applied for business
revitalization support utilizing alternative dispute resolution (ADR) procedures.

4Around July 2008 Willcom began soliciting sponsor candidates with an interest in providing
business support without an operational alliance. In tandem with business revitalization ADR
procedures, from September 2009 the company narrowed its selection of potential sponsors
for revitalization of its XGP and Personal Handy-phone System (PHS) businesses, finallyrevealing its desire for joint support from an investment fund designated by Advantage
Partners LLP, and Softbank Corporation. Later, as a result of ETIC’s coordination amonginterested parties, an agreement was reached on the basic policies for business revitalization,
and an application for support was submitted to ETIC.
Willcom had issued ¥35.0 billion in public corporate bond, but under ETIC procedures
financial support cannot be provided for public corporate bond, leases, contingent liabilities orsimilar obligations. Willcom therefore decided that in order to ensure fairness to its creditors, itwould utilize the legal corporate reorganization procedures in conjunction with ETIC support.
thWillcom filed a petition with the Tokyo District Court for on February 18 2010, and received
thapproval to commence reorganization procedures on March 12 2010.
Section 3: Necessary Measures to Maintain the Business Value of Willcom
Adoption of the following measures as part of the corporate reorganization procedures isessential for Willcom to continue stable operation of its telecommunications business, andavoid such risks as a loss of customers, and degradation of services.
1.
Protection of commercial debts
2.
Release of deposits in bank accounts used for settlement
3.
Continued use of bank accounts
Section 4: Overview of the Business Revitalization PlanN.B. The following plan may be changed or revised according to the business revitalization plan
based on Willcom’s legal corporate reorganization proceedings.
1. Business Plan
Willcom’s business operations comprise the existing Personal Handy-phone System (PHS)business, and the next-generation high-speed data transfer service eXtended Global
Platform (XGP) business, currently under development.
For the PHS business, the customer base will be maintained and strengthened through suchmeasures as taking advantage of the low-cost structure of the telecommunications network
to pursue further low-price strategies, and promoting a shift to 3G Mobile Virtual Network
Operator (MVNO) lines (utilizing lines of other mobile operators). At the same time, Willcom
will make strategic capital investments, generate synergies with companies in the Softbank
Group, and implement further cost cuts through personnel reductions.
For the XGP business, the plan calls for the transfer of business operations to a newcompany with investment from sponsors.
2. Sponsors
Willcom will increase capital through a third-party allocation of shares to an investment funddesignated by Advantage Partners LLP. It will also form business tie-ups with Softbank
Corporation and companies in the Softbank Group.
3. Corporate Reorganization
Under the plan, Willcom’s XGP business will be transferred to a new company established bythe sponsors. Following approval of the business revitalization plan shares held by existing
shareholders will be subject to a 100% capital reduction, and a capital increase (300 millionyen) made through a third-party allocation of shares to an investment fund designated by
Advantage Partners LLP.

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4. Content of Financial Support
Willcom expects to receive forgiveness for ¥114,487 million of its total debt of ¥149,487
million (transfer of rights under the business revitalization plan). The final amount of debt
forgiveness will be determined by the outcome of legal corporate reorganization
proceedings.
5. Financing PlanETIC may establish a commitment line for Willcom. Willcom is negotiating with major
financial institutions and other organizations to encourage them to provide financing for aportion of the necessary funds.
6. Numerical Targets (Summary)The earnings plan for Willcom may change as a result of the application for reorganization
procedures or other factors, but profitability is expected to increase as a result ofimplementing the business revitalization plan. The forecast for the fiscal year ending March2013 anticipates operating revenues of ¥148,532 million, with operating income of ¥12,305
million.
Section 5: Conformance with Standards for Support
1. Possession of Revitalization Potential
Willcom’s mainstay PHS business is an important means of communication in regional areas.
The service helps support the everyday lives of numerous subscribers, and is an essential
part of the social infrastructure for medical services, nursing care, and disaster prevention.
The XGP business is a next-generation high-speed data transfer service (greatercommunication speed compared to existing services). Therefore, Willcom has valuablebusiness resources offering revitalization potential.
2. Carrying Excessive Debt
Willcom is carrying approximately ¥134.5 billion in interest-bearing debt, which is anexcessive debt obligation relative to its earnings capacity. Debt forgiveness and other formsof financial support are essential for its business revitalization.
3. Prospects for Business Revitalization
3.1. Consent of Major Creditors for Application
Willcom’s application for support has been made jointly with The Bank ofTokyo-Mitsubishi UFJ, Ltd. and Mizuho Corporate Bank, Ltd.
3.2. Standards for Productivity Improvement
Of the productivity improvement standards, the plan forecasts (1) improvement in therate of return on equity of 43.1 percentage points in three years, (2) improvement in thetangible fixed asset turnover of 89.2 percentage points in three years, and (3)improvement in the amount of added value per employee of 29.0 percentage points inthree years. These projected increases satisfy the required productivity improvement
standards of 2 percentage points or more for (1), 5 percentage points or more for (2),and 6 percentage points or more for (3).
3.3. Standards for Financial Soundness
3.3.a. Ratio of interest-bearing debt to cash flow less than 10 times
The ratio of interest-bearing debt to cash flow is projected to be minus 1.6 times
in three years, satisfying the standard of less than 10 times.
3.3.b. Current revenue greater than current expenditures
The ratio of current revenue to current expenditures is projected to be 119.9% inthree years, satisfying the standard of current revenue greater than current
expenditures.

64. Comparison with Liquidation Value
The dividend yield on liquidation value of Willcom would be nil (0.0%). The recovery
rate for the non-secured portion of debt applicable to the subject business revitalization
plan (21.3%) is clearly greater than the recovery rate through bankruptcy proceedings.
5. Potential for Disposal of Debt, Shares or other Assets Acquired by ETIC within ThreeYears
In this case ETIC will not purchase debt.
The implementation of the subject business revitalization plan will establish a soundfinancial position for Willcom. As indicated in the business revitalization plan, because
ETIC does not anticipate any problems for the company in terms of its ability to repay
principal or bear the burden of interest, it has determined that there would be a strong
possibility of refinancing any ETIC financed debt through the involvement of a newsponsor or other means.
6. Connection with an Excessive Supply Structure
There is no scope for an increase in supply capacity as a result of the implementationof the subject business revitalization plan. Accordingly, in light of Article 19 of theguidelines for the application of the Act on Special Measures for Industrial
Revitalization and Innovation, the plan has been judged as “not hindering thedissolution of an excessive supply structure.”
7. Status of Discussions with Labor Unions
Willcom has no labor unions, but a briefing on the main points of the business
revitalization plan is planned for employees.
Section 6: Responsibility of Shareholders and Management
Management responsibility on the part of the directors will be clarified by the retirement of all
directors serving at the time the application was submitted. Ordinary shares issued by
Willcom will be subject to a 100% capital reduction under the reorganization procedures.

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