Sumitomo Metals Starts Considering the Subscription of Preferred Shares of SUMCO

Today, the Board of Directors of Sumitomo Metal Industries, Ltd. (Sumitomo Metals) decided to start considering the subscription of 15 billion yen in preferred shares of SUMCO Corporation (SUMCO), following their request. SUMCO is an equity-method affiliate of Sumitomo Metals.

1. Reasons to consider subscription for the third-party allotment of preferred shares

SUMCO has announced its “Business Reorganization Plan” that focuses on the withdrawal from some business, consolidation of production sites, and measures concerning its workforce. As a result, the net worth of SUMCO is expected to decrease significantly. In response to this, SUMCO decided to request subscription for its issuance of preferred shares by a third-party allotment.

Sumitomo Metals decided to consider accepting SUMCO’s request of subscription for the preferred shares of 15 billion yen as we believe the execution of “Business Reorganization Plan” and improvement of SUMCO’s profitability will lead to increase its corporate value. Details such as terms and conditions of the preferred shares will be announced as soon as they are determined.

2. Corporate Data regarding SUMCO

(1) Corporate name	SUMCO Corporation
(2) Representative	Yoichi Taguchi
(3) Head office	1-2-1 Shibaura, Minato-ku, Tokyo 105-8634
(4) Established	July 30, 1999
(5) Main business	Manufacture and sales of silicon wafers for semiconductors and solar cells
(6) Fiscal year	Ends at the end of January
(7) Number of employees	8,814 (consolidated, as of December 31, 2011)
(8) Net assets	208.2 billion yen (consolidated, as of October 31, 2011)
(9) Total assets	523.5 billion yen (consolidated, as of October 31, 2011)
(10) Capital	114.1 billion yen (consolidated, as of October 31, 2011)
(11) Total outstanding shares	257,751,000 shares of common stock
Shares held by Sumitomo Metals:	71,700,000 shares of common stock (27.82%)

3. Impact on Sumitomo Metals’ earnings
The subscription for the preferred shares is not expected to affect Sumitomo Metals’ earnings for the current fiscal year ending in March 2012.

4. Schedule (Plan)

Early March 2012	Preferred share issuance terms to be determined, final agreement to be concluded
Early May 2012	Payment for preferred shares