News Releases

Sept. 24, 2012

Notification of stock transfer accompanying change in status of consolidated subsidiary resulting from reorganization of Company's Thai business operations, and of change in status of consolidated subsidiary resulting from the said stock transfer

At a meeting of the Board of Directors of FamilyMart Co., Ltd. (hereinafter the Company) held , September 24, 2012, a decision was taken to reorganize the Company's business operations in Thailand through the conclusion of a new business partner relationship with Central Retail Corporation Limited (hereinafter, CRC), for the purpose of accelerating the pace of developing FamilyMart's operations in Thailand.

The Company will transfer to CRC all its share holdings in SFM Holding Co., Ltd. (hereinafter, SFM-H), which is the holding company for Siam FamilyMart Co., Ltd. (hereinafter, Siam FM), the Company's area franchiser in Thailand. Accordingly, the status of Siam FM, in which the Company holds a stake of 90.41% (including an indirectly held stake of 50.29%), will change from that of consolidated subsidiary to affiliated company under the equity method. (For further details on stock-holding relationships, please see the chart under "9. Stock-Holding Relationships.")

1. Purpose of reorganization of FamilyMart's business operations in Thailand

The Company commenced business operations in Thailand in 1992 (first store opened in 1993), centered on Siam FM. In fiscal 2009, Siam FM's operations moved into the black for the first time on a single-year basis, and since then, the number of stores operated by Siam FM has been increasing, and the Company's operations in Thailand as a whole have been making steady progress toward the creation of a reliable earnings base (746 stores as of August 31, 2012).

To further accelerate the pace of expansion of our Thai operations, we have taken the decision to operate jointly with CRC, which is a comprehensive retailing enterprise boasting strong expertise in the Thai market, with operations across a wide field in the retailing sector, including department stores and supermarkets.

In addition to the know-how that Siam FM has acquired over the past twenty years in the operation of Japanese-style convenience stores, we intend to effectively leverage CRC's capabilities in store development, product development, and infrastructure-related fields such as logistics. We believe that this will realize a powerful synergy, enabling us to create a network of 1,500 stores five years from now, and 3,000 stores in ten years time.

2. Overview of reorganization of Thai operations

(1) Changes to capitalization structure of SFM-H (Step 1)

As a result of the transference to CRC of all issued stock in SFM-H by the Company and other shareholders, SFM-H will become a wholly owned subsidiary of CRC, and the Company's capital stake in SFM-H will be reduced from 96.24% to zero. As a result, the Company's capital stake in Siam FM will be reduced from 90.41% (including 50.29% of shares indirectly owned) to 40.12%, and Siam FM's status with respect to the Company will change from that of consolidated subsidiary to that of equity-method affiliate.

(2) Changes to capitalization structure of Siam FM (Step 2)

The Company will acquire a certain percentage of the shares held in Siam FM by other shareholders, raising the Company's stake in Siam FM from 40.12% to 48.20%.

3. Overview of subsidiary whose status is to be changed

(1) SFM-H

(1) Company Name SFM Holding Co., Ltd.
(2) Address Vanit Building II, 10th Fl., Room 1001, 1126/2 New Petchburi Road, Makkasan, Rajchtewi, BKK 10400 Thailand
(3) Representative Kazushige Ueno
(4) Nature of Business Holding company
(5) Capital 125,644,100 baht
(6) Date of Establishment January, 1999
(7) Principal shareholder
and percentage of
shares held
FamilyMart Co., Ltd. - 96.24%
(8) Relationship between
the Company and SFM
Holding Co., Ltd.
Capital
relationship
The Company holds 598,941 shares of ordinary stock in SFM Holding Co., Ltd., representing 96.24% of all issued shares.
Personal relationship Two employees of the Company serve concurrently as directors of SFM Holding Co., Ltd.
Business relationship There is no business relationship to be stated between the Company and SFM Holding Co., Ltd. There is no significant business relationship between persons associated with the Company or the Company's affiliates, and persons associated with SFM Holding Co., Ltd. or affiliates of SFM Holding Co., Ltd.
(9) Operating results and financial position of SFM Holding Co., Ltd. for the past three fiscal years (non-consolidated basis)
Fiscal year end Term ended Dec. 2009 Term ended Dec. 2010 Term ended Dec. 2011
  Net assets ¥218 million ¥721 million ¥721 million
  Total assets ¥220 million ¥723 million ¥723 million
  Net assets per share ¥186.55 ¥615.09 ¥574.03
  Operating income ¥(0) million ¥(0) million ¥(0) million
  Ordinary income ¥(0) million ¥(0) million ¥(0) million
  Net income ¥(0) million ¥(0) million ¥(0) million
  Net income per share ¥(0.16) ¥(0.24) ¥(0.14)
  Dividend per share ¥0 ¥0 ¥0
(Sales figures have not been stated.)
(Calculations are based on an exchange rate of 1 baht = ¥2.50 (as of Aug. 31, 2012)

(2) Siam FM

(1) Company Name Siam FamilyMart Co., Ltd.
(2) Address Vanit Building II, 10th Fl., Room 1001A, 1126/2 New Petchburi Road, Makkasan, Rajchtewi, BKK 10400 Thailand
(3) Representative Kazushige Ueno
(4) Nature of Business Operator of convenience store business
(5) Capital 575,000,000 baht
(6) Date of Establishment September, 1992
(7) Principal shareholder
and percentage of
shares held
The Company, 40.12%; SFM Holding Co., Ltd., 50.29%
(8) Relationship between the Company and Siam FamilyMart Co., Ltd. Capital
relationship
The Company holds 2,306,861 shares of ordinary stock in Siam FM, representing 40.12% of all issued shares. In addition, the Company indirectly holds 2,891,600 shares of ordinary stock in Siam FM (50.29%) via its capital stake in SFM Holding Co., Ltd.
Personal relationship One director and five employees of the Company serve concurrently as directors of Siam FM.
Business relationship The Company has signed an area franchise contract with Siam FM under the terms of which the Company receives the payment of royalties.
(9) Operating results and financial position of Siam FamilyMart Co., Ltd. for the past three fiscal years (non-consolidated basis)
Fiscal year end Term ended Dec. 2009 Term ended Dec. 2010 Term ended Dec. 2011
  Net assets ¥1,515 million ¥2,529 million ¥2,753 million
  Total assets ¥4,835 million ¥5,376 million ¥6,099 million
  Net assets per share ¥866.13 ¥1,445.20 ¥478.83
  Total operating revenues ¥16,561 million ¥19,128 million ¥22,323 million
  Operating income ¥60 million ¥197 million ¥279 million
  Ordinary income ¥34 million ¥190 million ¥289 million
  Net income ¥2 million ¥13 million ¥224 million
  Net income per share ¥1.39 ¥3.43 ¥38.98
  Dividend per share ¥0 ¥0 ¥0
(Calculations are based on an exchange rate of 1 baht = ¥2.50 (as of Aug. 31, 2012)

4. Overview of counterparty to stock transfer

(1) Company Name Central Retail Corporation Limited
(2) Address Central Chidlom Tower ,14th Floor,22 Soisomkid Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330, Thailand
(3) Representative Tos Chirathivat
(4) Nature of Business Retailing operations
(5) Capital 2,114,000,000 baht
(6) Date of Establishment July 23, 1990
(7) Net assets ¥63,965 million
(8) Total assets ¥200,032 million
(9) Principal shareholder
and percentage of
shares held
Harng Central Department Store Ltd.100%
(10) Relationships between
the Company and
Central Retail Corporation Limited
Capital
relationship
There is no capital relationship to be stated between the Company and Central Retail Corporation Limited (CRC). There is no significant capital relationship between persons associated with the Company or the Company's affiliates, and persons associated with CRC Limited or affiliates of CRC.
Personal relationship There is no personal relationship to be stated between the Company and Central Retail Corporation Limited (CRC). There is no significant personal relationship between persons associated with the Company or the Company's affiliates, and persons associated with CRC Limited or affiliates of CRC.
Business relationship There is no business relationship to be stated between the Company and Central Retail Corporation Limited (CRC). There is no significant business relationship between persons associated with the Company or the Company's affiliates, and persons associated with CRC Limited or affiliates of CRC.
Related party or not CRC is not a related party of the Company. No persons associated with CRC nor any of its affiliates are related parties of the Company.
(Calculations are based on an exchange rate of 1 baht = ¥2.50 (as of Aug. 31, 2012)

5. Number of shares to be transferred, transfer amount, and ownership of stock in SFM-H prior to and subsequent to stock transfer

(1) Stock ownership prior to change of status 598,941 shares
(voting rights: 598,941)
(ownership percentage: 96.24%)
(2) Number of shares to
be transferred
598,941 shares
(voting rights: 598,941)
(ownership percentage: 96.24%)
(transfer amount = approx. 3,123 million baht (approx. ¥7,808 million), determined through negotiations between FamilyMart Co., Ltd. and CRC based on the estimated enterprise value of Siam FM [Note])
(3) Share ownership subsequent to change of status Number of shares owned: zero
(voting rights: zero)
(ownership percentage: zero)
(Note: The transfer amount may be subject to change in light of the accounts settlement of Siam FM in December 2012.)

6. Ownership of shares of Siam FM

(1) Share ownership prior
to change of status
598,941 shares
(voting rights: 598,941)
(ownership percentage: 96.24%)
(2) Share ownership
subsequent to change
of status (Note:
Following completion
of Step 1)
2,306,861 shares
(voting rights: 2,306,861. of which indirect ownership is zero)
(ownership percentage: 40.12%, of which indirect ownership is zero)
(3) Share ownership,
subsequent to change
of status (Note:
Following completion
of Step 2)
2,771,500 shares
(voting rights: 2,771,500 shares, of which indirect ownership is zero)
(ownership percentage: 48.20%, of which indirect ownership is zero)

7. Schedule

(1) Resolution of Board of
Directors
September 24, 2012
(2) Stock transfer September 26, 2012 (scheduled); Step 1 & Step 2

8. Future Outlook

As a result of the currently ongoing reorganization of the Thai business operations of FamilyMart Co., Ltd., we expect to post an extraordinary gain in the form of gain on sale accompanying the transfer of shares in SFM-H to CRC. In addition, the status of Siam FM with respect to the Company will change from consolidated subsidiary to equity-method affiliate. We intend to issue a further notification regarding the impact of these changes on the business performance of the Company for the term ending February 2013 when the details of the said impact become clear.

9. Stock-Holding Relationships

Stock-Holding Relationships
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