Showa Denko ("SDK"; TSE:4004) hereby announces that it has reached basic agreement with PT ANTAM Tbk (ANTAM) on the sale of SDK's whole shares in PT. INDONESIA CHEMICAL ALUMINA (ICA) to ANTAM. SDK resolved at its Board of Directors meeting today to sell the Company's whole shares in ICA to ANTAM. Currently, SDK applies equity method to ICA, while ANTAM is the parent company of ICA as the majority shareholder. SDK already announced on July 24, 2017 that the Company decided to start negotiations with ANTAM for the sale of SDK's whole shares in ICA.

1. Outline of ICA
(1) Company name: PT. INDONESIA CHEMICAL ALUMINA
(2) Locations: Head office: Jakarta, Indonesia; Plant: Tayan District, West Kalimantan, Indonesia
(3) Representative: President, Anas Safriatna
(4) Capital: US$188,500 thousand
(5) Shareholders: PT ANTAM Tbk (80%); Showa Denko K.K. (20%)
(6) Establishment: February 2007
(7) Products: Alumina and aluminum hydroxide

2. About transfer of SDK's whole share in ICA to ANTAM
(1) Transfer price: Memorandum price
(2) Date of resolution at the board of directors meeting: May 29, 2018
(3) Date of conclusion of share transfer agreement: May 29, 2018
(4) Date of execution of share transfer: August 31, 2018 (planned)

3. Influence on SDK's 2018 financial results
The plant of ICA now temporarily stops operation. Though it is predetermined that the two shareholders of ICA will bear the cost which will be incurred during the operation to restart the plant in accordance with the ratio of each company's interest, the influence of the restart cost on SDK's 2018 full-year consolidated financial results is expected to be insignificant.

With regard to ICA, SDK already recorded about 10.0 billion yen as loss on investment to companies under the application of equity method and about 6.7 billion yen as extraordinary losses concerning SDK's suretyship obligation and loans to ICA in SDK's financial results for the first half of 2017.

[Reference]
Forecast of 2018 consolidated financial results (announced on May 9, 2018) and actual consolidated financial results for 2017

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(Unit: Millions of yen)   Net sales   Operating   Ordinary   Net income
                                      income      income     attributable
                                                             to owners of
                                                             the parent
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Forecast of 2018 consolidated financial results
(Jan. - Dec. 2018)          935,000     137,000    131,500         85,000
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Actual consolidated financial results for 2017
(Jan. - Dec. 2017)          780,387      77,818     63,962         33,470 
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About Showa Denko K.K.

Showa Denko K.K. (SDK; TSE:4004, ADR:SHWDY), a major manufacturer of chemical products, serves a wide range of fields from heavy industry to electronics and computer industries. The Petrochemicals Sector provides cracker products such as ethylene and propylene, the Chemicals Sector provides industrial, high-performance and high-purity gases and chemicals for semicon and other industries, and the Inorganics Sector provides ceramic products, such as alumina, abrasives, refractory and graphite electrodes and fine carbon products. The Aluminum Sector provides aluminum materials and high-value-added fabricated aluminum, the Electronics Sector provides HD media, compound semiconductors such as ultra high-bright LEDs and rare earth magnetic alloys, and the Advanced Battery Materials Department (ABM) provides lithium-ion battery components. For more information, please visit www.sdk.co.jp/english/.

Source: Showa Denko K.K.

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