Notice Concerning Capital Increase of Subsidiary through Third-Party Allotment and Change in Specified Subsidiary (PDF:152KB)

1-13-1, Tsukiji Chuo-ku, Tokyo

JAPAN

Date: April 28, 2017

Contact: Takuya Aizawa

General Manager of Corporate Planning Dept.

Tel: +81-3-3544-2000

Hanwa Co., Ltd. ("Hanwa") announces that the Board of Directors meeting of Hanwa, held on April 27, 2017, resolved to subscribe for a capital increase of a subsidiary, Japan South Africa Chrome Co., Ltd. ("Japan South Africa Chrome"), through third party allotment of new shares issued for the purpose of its fundraising to acquire stakes of Samancor Chrome Holdings Proprietary Limited ("Samancor"), and as a result, the status of Japan South Africa Chrome will be changed to a specified subsidiary as capital of the subsidiary becomes 10% of Hanwa's capital.

1. Reason of subscribing for the capital increase

   On April 3, 2017, Hanwa has established a wholly-owned subsidiary, Japan South Africa Chrome, with the intention of acquiring the stakes of Samancor and obtaining the right to supply Ferro-Chromium for Japanese market. After negotiating, Japan South Africa Chrome will consequently acquire a 20% share of Samancor.

   Furthermore, Japan South Africa Chrome has decided to raise approx. 27.0 billion yen for the stake acquisition through a capital increase by third-party allotment and thus Hanwa has decided to subscribe for its capital increase with the cooperation of Japan Oil, Gas and Metals National Corporation ("JOGMEC"). As a result of the transaction, the ownership structure of Japan South Africa Chrome will become 50.1% of Hanwa and 49.9% of JOGMEC.

   In the meantime, Hanwa has had a direct stake in Samancor since 2005 and our share-holding ratio was 9% as of the end of March, 2017. Therefore, Hanwa will become a 19.02% of shareholder of Samancor, considering Hanwa's indirect shareholding through Japan South Africa Chrome (10.02% by Hanwa).

2. Details of the subsidiary

   Company Name	Japan South Africa Chrome Company Limited
   Head Office	1-13-1, Tsukiji, Chuo-ku, Tokyo, Japan
   Representative	Takeshi Amano, President
   Purposes	Investment and management of securities and business transactions executed through holding shares and/or equity of a company of metal mining industry
   Paid-in Capital	5,000 yen

   Date of Establishment	April 3, 2017
   Large Shareholder and its Share-Holding Ratio	Hanwa Company Limited 100%
   Relationship with Hanwa	Capital Relationship	Hanwa holds 100% of voting rights.
   	Personnel Relationship	Hanwa dispatches a president, two (2) directors and an auditor.
   	Business Relationship	None

   Note) After the transaction, the amount of capital and ownership structure will become as follows:

   Paid-in Capital	13.6 billion yen (Estimated)
   Ownership	Hanwa JOGMEC	50.1% 49.9%

3. Details of JOGMEC

   Company Name	Japan Oil, Gas and Metals National Corporation
   Head Office	2-10-1, Toranomon, Minato-ku, Tokyo, Japan
   Representative	Keisuke Kuroki, President
   Purposes	・Oil and Gas Upstream Investment and Research & Development ・Coal Resource Development ・Geothermal Resource Development ・Metal Strategy, Exploration and Technology Development ・Stockpiling ・Mine Pollution Control
   Paid-in Capital	878.9 billion yen
   Date of Establishment	February 29, 2004
   Relationship with Hanwa	Capital Relationship	None
   	Personnel Relationship	None
   	Business Relationship	None

4. Details of Samancor

   Company Name	Samancor Chrome Holdings Proprietary Limited
   Head Office	1st Floor, Block B Cullinan Place Johannesburg, South Africa
   Representative	Jürgen Schalamon, CEO
   Purposes	Mining of Chromite, production of Ferro-Chromium and its sales promotion
   Paid-in Capital	approx. 18.0 billion yen
   Year of Establishment	1975
   Large Shareholder	Terris Chrome Limited

   Relationship with Hanwa	Capital Relationship	Hanwa holds 9% voting rights.
   	Personnel Relationship	Hanwa will dispatch non-executive directors.
   	Business Relationship	Hanwa has purchased and sold Chrome-products produced by Samancor.

   Note) A large shareholder, Terris Chrome Limited, holds a majority share of Samancor.

   Number of Shares before Capital Increase	10,000 shares (The number of voting rights : 10,000) (Share-holding ratio of Hanwa : 100%)
   Number of Shares to increase	13,635,393,374 shares (Estimated) (The number of voting rights : 13, 635,393,374 (Estimated))
   Number of Shares after Capital Increase	13,635,403,374 shares (Estimated) (The number of voting rights : 13, 635,403,374 (Estimated)) (Share-holding ratio of Hanwa : 50.1%)

5. Situations of holding shares Japan South Africa Chrome

   Note) The abovementioned number of shares will fluctuate depending on the final capital increase amount converted into yen. Hanwa aims to hold a 50.1% share of Japan South Africa Chrome in any case.

   Samancor

   Hanwa has already held a 9% share of Samancor. Including the indirect stake acquisition through Japan South Africa Chrome (10.02% by Hanwa), Hanwa will hold a total 19.02% of share of Samancor.

   Number of Shares before Transaction	900 shares (Share-holding ratio of Hanwa : 9%)
   Number of Shares to increase	1,002 shares (50.1% of 2,000 shares that Japan South Africa Chrome acquires)
   Number of Shares after Transaction	1,902 shares (Share-holding ratio of Hanwa : 19.02%)

6. Schedule

   Resolution of the Board of Directors	April 27, 2017
   Date of Capital Increase	April 28, 2017

7. Impact on financial results

Although this transaction may have a certain impact on the consolidated financial results of Hanwa, it has not yet calculated the reasonable amount. After calculation, details will be disclosed as soon as a material influence on the financial results is found.

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