Mar. 28. 2008
Marubeni Corporation (“Marubeni”) announces that it has elected to post as a lump sum the losses from the fund management operations of Marubeni International Finance p.l.c. (“MIF”). Marubeni established MIF in 1984. Since then Marubeni has positioned MIF as the core company of its fund management operations and has earned stable profits from fund management over many years. However, after the market value of the assets in the portfolio declined significantly amid the rapid credit crunch triggered by the subprime mortgage crisis, Marubeni has determined that it will be difficult to restore the lost value in a short period, considering the current market environment.
Marubeni has also elected to withdraw from fund management operations through investment in structured securities, including SIVs, as a result of reviewing the operations in terms of asset efficiency, risk and returns, and will consequently dissolve MIF, which has placed structured securities at the core of its asset management portfolio.
As a result of the determination, MIF will post a loss of \17.6 billion (before tax) as a loss from the revaluation of the assets under management.
The loss has a negative effect of \10.7 billion on the consolidated net income of Marubeni for the fiscal year ending March 2008. However, the non-consolidated results and consolidated earnings forecast for the fiscal year ending March 2008, announced on October 26, 2007, do not change.
*SIV: Structured Investment Vehicle
Profile of MIF
Name : Marubeni International Finance p.l.c.
Business : Finance
Founded : April 1984
Home office location : London, United Kingdom
Representative : Yosuke Yuasa
Paid-in Capital : US$128,246,000
Shareholders and holding ratios : Marubeni 95%, Marubeni Europe p.l.c. 5%
End of fiscal yea r: February