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GMO Internet forms capital and business alliance with Aozora Bank and Aozora Trust to operate joint net bank

TOKYO, June 24, 2016 (GLOBE NEWSWIRE) -- GMO Internet, Inc. (TSE1:9449) today announced a capital and business alliance with Aozora Bank, Ltd. and Aozora Trust Bank,Ltd. regarding a joint venture Internet bank, to be operated under Aozora Trust. Effective today, the parties executed an investment agreement, a shareholder agreement, and a business alliance agreement.

.Objectives of the Alliance

GMO Internet and Aozora Bank partnered on this next-generation Internet bank to respond to changing needs of customers. This partnership brings together Aozora Bank Group’s extensive banking experience and risk management expertise, and GMO Internet Group’s knowledge and expertise in Internet technology and track record in ecommerce and Internet securities. Leveraging their respective expertise, the parties will strive to further enhance business and corporate value, and create added social value.

2.Details of the Alliance
(1) Overview of business alliance agreement
1) Internet Bank Concept
“Offer new experiences and convenience to customers through simple and highly sophisticated services leveraging banking and IT”

  • Provide SME customers and small ecommerce businesses with cost effective, productivity enhancing banking services
  • Take full advantage of IT in providing smart next-generation functions to our retail customers, and collaborate with GMO CLICK Securities to offer attractive services integrating banking and securities
  • Ensure timely development of unique services through partnerships with FinTech companies, and collaborations between GMO Internet and Aozora Bank
  • Leverage latest system technology to provide services at a significantly reduced cost

2) Commencement of operations
We aim to commence operations during FY2017. In preparation for the scheduled launch, the Bank will set up an “Internet Bank Project Launch Office” within Aozora Trust immediately after the third party allocation of shares outlined below.
3) Projected expenditure for Internet bank launch
The cost for Aozora Trust to commence the Internet banking operations is an estimated 5.5 billion yen.
4) Trust services provided by Aozora Trust
Aozora Trust intends to continue providing the trust services currently offered.

(2) Capital and business alliance
Under the Alliance, Aozora Trust will implement a capital increase of 6.6 billion yen through a third party allocation of new shares. Details are outlined below.

Agreements under the Alliance, including the shareholders’ agreement, provide for the transfer to GMO Internet of all Class A and Class B shares acquired by Aozora Bank on either the date on which GMO Internet obtains necessary authorization from the relevant authority to become a major shareholder of Aozora Trust, or 5 years from the official launch date of the Internet bank, whichever comes first. In addition, subject to obtaining the aforementioned authorization from the relevant authority, GMO Internet may convert any class shares acquired to common shares.

Aozora Trust will issue the following 3 types of shares.

1) Common shares
No. of shares 20,580 shares
Issuance amount 1,160,917,800 yen
Underwriter GMO Internet
2) Class A shares
No. of shares 96,430 shares
Issuance amount 5,439,616,300 yen
Underwriter Aozora Bank
3) Class B shares
No. of shares 490 shares
Issuance amount 27,640,900 yen
Underwriter Aozora Bank

Ratio of voting rights after the capital increase will be as follows, if GMO Internet acquires all relevant class shares from Aozora Bank and exercises its right to convert said shares to common shares. In accordance with the agreements under the Alliance, including the shareholders’ agreement, GMO Internet intends to transfer a portion of common shares acquired from the capital increase to subsidiary, GMO CLICK Holdings, Inc. In the event of such transfer, GMO Internet voting rights would change accordingly.

CurrentAfter capital increaseAfter GMO Internet
acquires Class A
shares and converts to
common shares
After GMO Internet
acquires Class A and
Class B shares and
converts to common shares
Aozora 100.0 85.1 50.1 50.0
GMO 0.0 14.9 49.9 50.0


3.
Schedule

June 24, 2016Signing of investment, shareholder, business alliance agreements
June 29, 2016Payment date for new shares, Alliance commencement (scheduled)
FY2017Internet bank launch (scheduled)


4. Outlook

If the company expects the execution of the agreement to impact consolidated earnings, details will be announced promptly.

Company Name: GMO Internet, Inc. Telephone: +81 3 5456 2555 URL: http://www.gmo.jp/en

Source: GMO Internet, Inc.