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TOKYO, Japan, January 25, 2001 --- Hitachi, Ltd. today announced that on January 31, 2001, it will transfer its Fiber Optic Components Business Unit to OpNext Japan, Inc., a subsidiary Hitachi established in September 2000 to strengthen its fiber optic components business.
Gains arising from the transfer and other extraordinary gain/loss items will be included in the unconsolidated financial results in the fiscal year ending March 31, 2001.
To ensure its ability to respond to the fast-growing optical components market, in September 2000, Hitachi established a U.S. subsidiary, OpNext, Inc., to conduct Hitachi's fiber optic components business in the U.S. At the same time, Hitachi established OpNext Japan to separate its Fiber Optic Components Business Unit of the Telecommunications & Information Infrastructure Systems Group.
In December 2000, Hitachi and OpNext Japan entered into an agreement covering the transfer, and investigation by an inspector was completed on January 17. Hitachi will transfer the Fiber Optic Components Business Unit to OpNext Japan on January 31, and OpNext Japan will start operations on February 1.
Also in February, OpNext Japan's stock, wholly owned by Hitachi, will be invested in OpNext. Following this transaction, OpNext will raise its capital by issuing new shares up to $450 million to Clarity Group, a U.S.-based equity partnership. OpNext plans to use the investment to set up a globally integrated operation and expand its fiber optic components business.
<Outline of Transfer>
<Outline of OpNext Japan, Inc.>
<Outline of OpNext, Inc.>
2. Extraordinary gain arising from the transfer and other extraordinary gain/loss items for unconsolidated financial results
In its unconsolidated financial results for the fiscal year ending March 31, 2001, Hitachi will include an extraordinary gain of approximately 23.1 billion yen arising from the transfer of its Fiber Optic Components Business Unit.
Hitachi will also include an extraordinary loss of approximately 13.9 billion yen for restructuring expenses involved in a restructuring of the business operations of a U.S. subsidiary, Hitachi Data Systems, for expanding its storage solutions business; and an extraordinary loss of approximately 11.8 billion yen for expenditures involved in reorganizing TV manufacturing operations in a U.K. subsidiary, Hitachi Home Electronics (Europe) Ltd.
Hitachi will also include extraordinary gains resulting from the sale of land and marketable securities. At this point, the company is not changing its forecasts of consolidated or unconsolidated results for the fiscal year ending March 31, 2001.
Statements in this news release contain forward-looking statements which reflect management's current views with respect to certain future events and financial performance. Words such as "anticipate," "believe," "expect," "estimate," "intend," "plan," "project" and similar expressions which indicate future events and trends identify forward-looking statements. Actual results may differ materially from those projected or implied in the forward-looking statements and from historical trends. Further, certain forward-looking statements are based upon assumptions of future events which may not prove to be accurate.
Factors that could cause actual results to differ materially from those projected or implied in any forward-looking statements include, but are not limited to, rapid technological change, particularly in the Information Systems & Electronics segment; uncertainty as to Hitachi's ability to continue to develop products and to market products that incorporate new technology on a timely and cost-effective basis and achieve market acceptance; fluctuations in product demand and industry capacity, particularly in the Information Systems & Electronics segment and the Consumer Products segment; exchange rates and their fluctuations between the yen and other currencies in which Hitachi makes significant sales or in which Hitachi's assets and liabilities are denominated, particularly between the yen and the U.S. dollar; uncertainty as to Hitachi's access to liquidity or long-term financing, particularly in the context of restrictions or availability of credit prevailing in Japan; uncertainty as to Hitachi's ability to implement measures to reduce the potential negative impact of fluctuations in product demand and/or exchange rates; general economic conditions and the regulatory and trade environment of Hitachi's major markets, particularly, the United States, Japan and elsewhere in Asia, including, without limitation, continued stagnation or deterioration of the Japanese or other East Asian economies, or direct or indirect restriction by other nations of imports; uncertainty as to Hitachi's access to, or protection for, certain intellectual property rights, particularly those related to electronics and data processing technologies; Hitachi's dependence on alliances with other corporations in designing or developing certain products; and the market prices of equity securities in Japan, declines in which may result in write-downs of equity securities Hitachi holds.
|WRITTEN BY Corporate Communications Division