Commencement of talks towards the capital tie-up and business alliance consisting of Nippon Suisan Kaisha, Ltd. providing management assistance to Daisui Co.,Ltd.
Nippon Suisan Kaisha, Ltd. (hereinafter "Nippon Suisan") and Daisui, Inc. (hereinafter "Daisui") hereby announce that, at the respective Board of Directors meetings held today at each company, resolutions were passed to commence talks on the assistance to be provided by Nippon Suisan, as requested by Daisui, in order to turnaround Daisui's business, as follows.
1. Background and purpose for commencement of the talks
Daisui, as a primary wholesaler on the central wholesale markets of Osaka prefecture, Osaka City, Kyoto City and Kobe City, is engaged primarily in the wholesale of marine products, pursuant to the Wholesale Market Law.
Nippon Suisan has for many years maintained a business relationship with Daisui, which is a major sales destination for Nippon Suisan's marine products, and has been its top shareholder (Nippon Suisan holds 7.94% of the total number of issued shares of Daisui).
Although Daisui, by setting up an in-house investigation committee, had been conducting a full-scale investigation into the illicit transactions disclosed on November 13 of last year, it received a "no opinion" on the report on quarterly results from its accounting auditors in regard to its 2nd quarter financial reports. Consequently, Daisui's shares are currently designated as "securities on alert" (under examination) by the Osaka Securities Exchange.
Primarily for the reason stated above, Daisui has been in a difficult situation both in terms of cash flow and in its transactions and has thus requested Nippon Suisan for assistance.
Assuming that Daisui will continue its effort to crackdown on its illicit transactions and identify the parties responsible, and comprehensively taking into account Daisui's transaction record to date and its role as the top shareholder in Daisui, as well as the public nature of Daisui as the primary wholesaler on the central wholesale markets, and to the end of preventing an undue credit crisis, Nippon Suisan has agreed to commence talks with Daisui on providing assistance, as outlined below.
(1) Nippon Suisan will provide Daisui with vigorous assistance in all aspects of management.
(2) Nippon Suisan will dispatch leading members of management to Daisui and Daisui will accept them.
(3) Daisui will receive assistance from Nippon Suisan, draw up specific improvement measures to thoroughly enforce corporate governance and compliance, and implement these measures.
(4) Nippon Suisan will increase its holdings of Daisui shares and provide funding assistance to Daisui.
2. Effects of the talks between the two companies and the assistance from Nippon Suisan
Daisui intends to promptly shake up its corporate climate and stabilize its business foundations. As a primary wholesaler on the central wholesale market, Daisui is committed to continue utilizing its market functions and play an integral part in the distribution of marine products from the producers to the consumers.
Nippon Suisan, together with Daisui, intends to improve its supply chain function of marine products and to raise the level of its services, in order to realize further growth and profitability.
It is our firm belief that achieving success in these talks/assistance will not only enhance the enterprise value and shareholders' interests of the two companies but also contribute to the interests of all stakeholders including our customers and employees, as well as the society at large.
3. Upcoming schedule
Both companies are scheduled to immediately set up project teams to earnestly discuss the details of the assistance outlined above and make an announcement on the state of progress by the end of February 2009. However, in the event that a certain level of agreement is reached in the meantime, such facts will be released immediately.