November 7th, 2023
Company Name
Name of Representative

Inquiries

Integral Corporation
Reijiro Yamamoto, Representative
Director and Partner(Securities code : 5842 Growth Marketof the Tokyo Stock Exchange)
Yasuaki Sumikawa, CFO & Controller(TEL. 03-6212-6100)

Notice of Partial Transfer of Shares of Skymark Airlines Inc.
Integral Corporation is pleased to announce that Integral Corporation and its affiliated funds, Integral 2 Limited
Partnership and Integral Fund II (A) L.P. (collectively “Fund II Series”, and collectively with Integral Corporation“Integral”), have signed a share transfer agreement (“Agreement”) to sell the partial shares (equivalent to 13.0%
of total number of shares issued and outstanding) of Skymark Airlines Inc. (“Skymark” or “the Company”) toSUZUYO HOLDINGS Co.,Ltd (“Suzuyo Holdings”).
1．Background of the Transfer
Skymark, founded in 1996, entered the domestic airline market as a new independent player with thederegulation and has continued to provide air transportation services based on the concepts of "reasonable prices"and "simple and easy-to-understand services.
Integral has been one of the shareholders of the company since its civil rehabilitation proceedings in 2015, andtogether we overcame difficulties such as civil rehabilitation and the Covid-19 pandemic, leading to the company'slisting on the Growth Market of the Tokyo Stock Exchange in 2022. Skymark is currently the third largest airline
in Japan with the 23 domestic routes and 12 cities, operating approximately 150 flights per day, and boasts thehighest on-time performance and customer satisfaction.
By the transfer of shares to Suzuyo Holdings, who is an important business partner of Skymark, SuzuyoHoldings will become a close shareholder who respects Skymark's philosophy. This transaction is expected toboost the value of Skymark through mutually beneficial business alliances in the future.
2. Overview of Investee Company (Skymark)(1)

NameSkymark Airlines Inc.

(2)

3-5-10 Haneda Airport, Ota-ku,Tokyo 144-0041 Japan(4)

Address
Title and name ofrepresentative
Description of business(5)

Share capital

JPY 100 million(6)

Date of establishment

November 12th, 1996

(3)

(7)

Major shareholders andownership ratio（As of March 2023）

Representative Director, President and Executive Officer Hayao HoraRegular air transportation service, etc

Integral 2 Limited Partnership

19.51%ANA HOLDINGS INC.

12.93%UDS Airlines Investment Limited Partnership10.53%SSBTC CLIENT OMNIBUS ACCOUNT (Standing Proxy: Securities
Services Department, The Hongkong and Shanghai Banking
Corporation Limited, Tokyo Branch)

7.54%

GOLDMAN SACHS INTERNATIONAL (Standing Proxy: Goldman
Sachs Japan Co., Ltd.)

4.10%

MSIP CLIENT SECURITIES(Standing Proxy: Morgan Stanley MUFG
Securities Co., Ltd.)
1

3.79%

STATE STREET LONDON CARE OF STATE STREET BANK AND
TRUST, BOSTON SSBTC A/C UK LONDON BRANCH CLIENTSUNITED KINGDOM (Standing Proxy: Securities
Services Department, The Hongkong and Shanghai Banking
Corporation Limited, Tokyo Branch)

2.19%

INTEGRAL FUND Ⅱ(A)L.P. (Standing Proxy: Daiwa Securities Co.
Ltd.)

2.16%

Integral II SS Investment Limited Partnership

1.90%

CEPLUX- THE INDEPENDENT UCITS PLATFORM 2 (Standingproxy: Citibank, N.A., Tokyo. Branch)
Capital(8)

Relationship between theCompany and Integral
Corporation and its groupcompanies

1.82%

Integral owns 20.3% of shares of Skymark

relationship
Personnel

One director and one corporate auditor of Integral

relationship

Corporation serve as directors of Skymark

Business

Not applicable.

relationship(9)

Operating results and financial portions of the Company for the latest year
Fiscal year ended
March, 2021
March, 2022

March, 2023

Net assets

JPY 10,424 MM

JPY 9,299 MM

JPY 23,917 MM

Total assets
Shareholder’s Equity
per Share
Revenue

JPY 85,452 MM

JPY 93,559 MM

JPY 107,837 MM

JPY 231.65

JPY 196.67

JPY 396.46

JPY 34,064 MM

JPY 47,147 MM

JPY 84,661 MM

Operating profit

JPY △31,675 MM

JPY △16,694 MM

JPY 3,453 MM

Ordinary profit

JPY △29,602 MM

JPY △15,079 MM

JPY 3,713 MM

Profit

JPY △16,342 MM

JPY △6,729 MM

JPY 5,726 MM

JPY△363.16

JPY △145.78

JPY 111.8

JPY 0

JPY 0

JPY 5

Profit per share
Dividend per share

3. Overview of the counterparty (Suzuyo Holdings)

(1)

Name

SUZUYO HOLDINGS Co.,Ltd(2)11-1, Irifune-cho, Shimizu-ku, Shizuoka-shi, Shizuoka(4)

Address
Title and name ofrepresentative
Description of business(5)

Share capital

JPY 10 million(6)

Date of establishment
Major shareholders andownership ratio（As of March 2023）

December 27th, 2000

(3)

(7)

Representative Director Yohei Suzuki
Financial and consulting services

Kenichiro Suzuki
Capital(8)

Relationship between theCompany and Integral
Corporation and its groupcompanies

Not applicable.

relationship
Personnel

Not applicable.

relationship
Businessrelationship

Not applicable.

2100%4. Timeline
The transfer of shares under the agreement is expected to be executed during November 2023.
5. Future Outlook
Skymark is a publicly traded company, and the change in the fair value resulting from changes in its stock priceis quarterly recorded in our Consolidated statement of Profit and Loss. Therefore, the impact of the Share Transfer
on Gross investment return (See 2. Fair value movement on investment portfolio and 3. Fair value movements on
subsidiaries measured at fair value in the table below) in our consolidated results for the fiscal year ending
December 31, 2023 will be insignificant (*1).
On the other hand, by making the distribution related to this share transfer, Fund II Series is expected to exceed
the hurdle rate (8% on an annualized basis on the deployment amount) stipulated in the partnership agreement,and Integral Group is expected to start receiving Carried Interest from Fund II Series. As for the impact of thereceipt of carried interest on the consolidated financials for the fiscal year ending December 31, 2023, Grossinvestment return will increase by approximately JPY 3.3 billion, Profit before income taxes will increase byapproximately JPY3.3 billion, and Profit for the year will increase by approximately JPY 2.2 billion respectively
from the amount of each items in the Condensed Quarterly Consolidated Statement of Profit or Loss for the Sixmonth period ended June 30, 2023. (*2).

【Excerpts from the Consolidated Statement of Proft or Loss and items that will be affected by this sharetransfer】
AmountNote
1Realized profits/(losses) on disposal of investments
xxx
2
Fair value movements on investment portfolioxxx (*1)
3
Fair value movements on subsidiaries measured at fair valuexxx (*1)
4
Dividends
xxx
5Interest income from investment portfolioxxx
6
Gross investment return (Total from 1 to 5)xxx (*1)
7
Fund Management feesxxx
8
Carried interestxxx (*2)
9Management support feesxxx
10 Other operating incomexxx
Revenue (Total from 6 to 10)xxx(*1) Items that will be affected by this transfer (The impact will be insignificant).
(*2) Items that Integral Group will receive from Fund II Series as a result of the distribution related to theShare Transfer.
【Description of Carried Interest】
Under the partnership agreements, as a General Partner, Integral Group are entitled to distribution referred toas carried interest in the amount of up to 20% (excluding the amount of general partnership interest held by ourdirectors and employees) of cumulative gains on capital invested (such as consideration paid in exchange fortransferring shares of the investees) to the extent that such gains surpass the hurdle rate of 8% of the invested
amount, after deducting the invested amount and partnership fees (administrative fees and other expert fees related
to fund management) from the gains from investees.
We record carried interest as a component of revenue when we deem that it is certain that the funds will make
distributions in excess of the hurdle rate set forth in the partnership agreement and that it is highly probable that asignificant claw-back will not occur, at which time carried interest vests.

3