(NOTE) This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the Japanese original shall prevail.
Date: April 17, 2026
Company Name: Akebono Brake Industry Co., Ltd. Representative: Hiroshi Nagaoka, President & CEO (Securities Code: 7238; TSE Prime Market)
Announcement Regarding Change in Consolidated Subsidiary (Transfer of Equity Interests and Third-Party Capital Increase) and Recording of Extraordinary IncomeAkebono Brake Industry Co., Ltd. (the "Company") hereby announces that, at a meeting of the Board of Directors held today, it resolved to transfer a portion of its equity interests in Akebono Corporation (Guangzhou) ("ACG"), a consolidated subsidiary of the Company in China, to its joint venture partner, Fujiwa Machinery Industry (Kunshan) Co., Ltd., and that ACG will implement a third-party capital increase (collectively, the "Transaction").
In connection with the Transaction, the Company also expects to record extraordinary income, as described below.
Upon completion of the Transaction, ACG is expected to be reclassified from a consolidated subsidiary to an equity-method affiliate of the Company.
Reason for and Method of the Transaction
ACG was established with the primary purpose of manufacturing and selling disc brakes and drum brakes in China.
As part of the restructuring of the Company's business operations in China, the Company has decided to transfer the principal responsibility for the management of ACG to Fujiwa Machinery Industry (Kunshan) Co., Ltd. and its parent company, LIOHO MACHINE WORKS, LTD. (including its affiliated companies, collectively the "LIOHO Group"), and to place greater emphasis on the management of Akebono Corporation (Suzhou), which manufactures and sells disc brake pads.
In connection with the transfer of the principal responsibility for management, the Company will transfer approximately half of its equity interests in ACG to Fujiwa Machinery Industry (Kunshan) Co., Ltd., and, at the same time, ACG will implement a third-party capital increase under which approximately 18% of its capital will be contributed by Kunshan Technical Automotive Center Co., Ltd., a member of the LIOHO Group.
As a result of these transactions, the ownership ratios in ACG will change to 30% for the Company, 55% for Fujiwa Machinery Industry (Kunshan) Co., Ltd., and 15% for Kunshan Technical Automotive Center Co., Ltd.
Outline of the Subsidiary Subject to the Change
(1) Company Name
Akebono Corporation (Guangzhou)
(2) Location
No. 8 Hefeng 1st Street, Yonghe Economic Zone of Guangzhou
Development District, Guangzhou
(3) Representative
Masaaki Ando, Chairman of the Board
(4) Business Contents
Manufacture and sales of disc brakes and drum brakes
(5) Capital
62 million yuan
(6) Established
October 13, 2004
(7) Ownership ratio
Akebono Brake Industry Co., Ltd. 70%
Fujiwa Machinery Industry (Kunshan) Co., Ltd. 30%
(8)
Relationship between the listed company and the relevant company
Capital
relationship
The Company holds 70% of the equity
interests.
Personnel relationship
One director of the Company serves as Chairman; three employees serve as directors; and one employee serves as a
supervisor.
Business
relationship
Supply of products and parts to each other.
(9) Financial results and financial position of the relevant company for the most recent three fiscal years
Fiscal year
Fiscal year ended
December 31, 2023
Fiscal year ended
December 31, 2024
Fiscal year ended
December 31, 2025
Net assets
168 million yuan
167 million yuan
197 million yuan
Total assets
438 million yuan
339 million yuan
390 million yuan
Net sales
451 million yuan
395 million yuan
453 million yuan
Operating profit
11 million yuan
23 million yuan
38 million yuan
Ordinary profit
10 million yuan
19 million yuan
41 million yuan
Profit
6 million yuan
(1 million yuan)
31 million yuan
Outline of the Transferee of the Equity Interests
(1) Company Name
Fujiwa Machinery Industry (Kunshan) Co., Ltd.
(2) Location
No.988 Nanhe Road, Kunshan Economic & Technology
Development Zone, Jiangsu
(3) Representative
TSUNG HSU-SHUN, Chairman of the Board
(4) Business Contents
Casting, machining and assembly of automotive brake parts, drive
parts and engine parts
(5) Capital
36.7 million U.S. dollars
(6) Established
December 22, 1995
(7) Ownership ratio
LIOHO INVESTMENT LTD
SUMITOMO CORPORATION
55% (100% subsidiary of LIOHO MACHINE WORKS, LTD.)
45%
Relationship betweenthe
(8) listed company and the relevant company
There are no capital, personnel or business relationships between the Company and the Transferee, and it is not a related party of the
Company.
Outline of the Third-Party Capital Contributor
(1) Company Name
Kunshan Technical Automotive Center Co., Ltd.
(2) Location
Building No. 3, No. 401 Sanxiang Road, Kunshan City, Jiangsu
(3) Representative
TSUNG HSU-SHUN, Chairman of the Board
(4) Business Contents
Research and development, including the design, prototyping and
testing of control components such as brake discs and knuckles
(5) Capital
5 million yuan
(6) Established
April 24, 2014
(7) Ownership ratio
LIOHO MACHINE WORKS (CHINA) HOLDING CO., LTD. 100%
(100% subsidiary of LIOHO INVESTMENT LTD)
Relationship betweenthe
(8) listed company and the relevant company
There are no capital, personnel or business relationships between the Company and the Third-Party Capital Contributor, and it is not
a related party of the Company.
Ownership Ratios Before and After the Transaction
(1) Ownership ratio before the Transaction
70％
(2) Ownership ratio after the Transaction
30％
(3) Transfer price
Not disclosed due to confidentiality obligations under the transfer
agreement and at the request of the Transferee.
Schedule
(1) Executionofequityinterest transfer agreement
April 27, 2026 (scheduled)
(2) Closing of the Transaction
June 30, 2026 (scheduled)
Outlook
As a result of the Transaction, the Company expects to record Gain on sales of investments in capital of subsidiaries and associates of approximately 0.3 billion yen in its consolidated financial statements and approximately 1.0 billion yen in its non-consolidated financial statements for the fiscal year ending March 31, 2027, respectively.
End of Document