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M&A and Subsidiary Changes3777Environment Friendly Holdings Corp.Information and Communications, Services and Others

(Progress on Disclosed Matter) Notice Regarding the Acquisition of Shares in a Special-Purpose Company Related to a South Korean Solar Power Generation Business (Making It a Consolidated Subsidiary)

EF Investment, a consolidated subsidiary of the Company, acquired all shares in 3 special purpose companies engaged in the solar power generation business in Korea, making them consolidated subsidiaries. The total acquisition price was KRW 201 million, and construction is being advanced for 3 power plants with a combined capacity of approximately 2.6 MW.

Worth reading
70In focus
0–100. This measures how worthwhile something is to read, not how good or bad the company is.
Direction
Neutral
Direction inferred from the company’s description.
Scale
201000000
Korean won
Wording
Conditional
How definitive the wording is.

This transaction

Acquisition of shares and execution of loans
CounterpartyEcosolar Power Co., Ltd.
Disclosing companyEnvironment Friendly Holdings Corp.
EFI Solar 1 Co., Ltd., EFI Solar 2 Co., Ltd., EFI Solar 3 Co., Ltd.Subject of this transactionNumber of shares acquired 20,000 shares and 20,000 voting rights (EFI Solar 1), 20,000 shares and 20,000 voting rights (EFI Solar 2), 200 shares and 200 voting rights (EFI Solar 3)Voting rights ownership percentage Before 0.0%（EFI Solar 1）, 0.0%（EFI Solar 2）, 0.0%（EFI Solar 3） → after 100.0%（EFI Solar 1）, 100.0%（EFI Solar 2）, 100.0%（EFI Solar 3）
Date of board resolution11 May 2026
Contract Date11 May 2026
Execution Date / Effective Date11 May 2026
Target company

Development, construction and operation of solar power plants

Location Wonju, Gangwon-do, Republic of Korea; Chungju, Chungcheongbuk-do, Republic of KoreaShare capital KRW 100,000,000 (EFI Solar 1 Co., Ltd.), KRW 100,000,000 (EFI Solar 2 Co., Ltd.), KRW 1,000,000 (EFI Solar 3 Co., Ltd.)Date of incorporation 15 October 2025 (EFI Solar 1 Co., Ltd.), 15 October 2025 (EFI Solar 2 Co., Ltd.), 29 December 2025 (EFI Solar 3 Co., Ltd.)
Consideration and expenses
Acquisition priceTotal: KRW 201,000,000 (EFI Solar 1: KRW 100,000,000; EFI Solar 2: KRW 100,000,000; EFI Solar 3: KRW 1,000,000)
Expenses other than the acquisition priceDue diligence and other costs (estimated total): ¥7 million (EFI Solar 1: ¥3 million; EFI Solar 2: ¥3 million; EFI Solar 3: ¥1 million)
Type of ConsiderationCash
Funding arrangementsThe construction costs for the power generation facilities of this SPC are expected to be funded through loans using the Group's operating funds and project financing procured in Korea. However, no specific arrangements have been decided at this time.
Impact on Business Performance

The impact on the Company's consolidated results for the fiscal year ending December 2026 is currently under review. If disclosure becomes necessary, the Company will make a timely disclosure.

Procedures and assumptions
Management structure after acquisitionFollowing the acquisition, this SPC is expected to outsource to Eco Network the management of EPC (engineering, procurement and construction) activities and operations and maintenance (O&M) after completion.
This transaction
ItemDetails
Transaction nameAcquisition of shares and execution of loans
Counterparty nameEcosolar Power Co., Ltd.
Name of the Subject CompanyEFI Solar 1 Co., Ltd., EFI Solar 2 Co., Ltd., EFI Solar 3 Co., Ltd.
Business Description of the Subject CompanyDevelopment, construction and operation of solar power plants
Location of the Subject CompanyWonju, Gangwon-do, Republic of Korea; Chungju, Chungcheongbuk-do, Republic of Korea
Capital Stock of the Subject CompanyKRW 100,000,000 (EFI Solar 1 Co., Ltd.), KRW 100,000,000 (EFI Solar 2 Co., Ltd.), KRW 1,000,000 (EFI Solar 3 Co., Ltd.)
Date of Establishment of the Subject Company15 October 2025 (EFI Solar 1 Co., Ltd.), 15 October 2025 (EFI Solar 2 Co., Ltd.), 29 December 2025 (EFI Solar 3 Co., Ltd.)
Acquisition priceTotal: KRW 201,000,000 (EFI Solar 1: KRW 100,000,000; EFI Solar 2: KRW 100,000,000; EFI Solar 3: KRW 1,000,000)
Expenses other than the acquisition priceDue diligence and other costs (estimated total): ¥7 million (EFI Solar 1: ¥3 million; EFI Solar 2: ¥3 million; EFI Solar 3: ¥1 million)
Type of ConsiderationCash
Number of shares acquired20,000 shares and 20,000 voting rights (EFI Solar 1), 20,000 shares and 20,000 voting rights (EFI Solar 2), 200 shares and 200 voting rights (EFI Solar 3)
Voting rights ownership percentageBefore 0.0%（EFI Solar 1）, 0.0%（EFI Solar 2）, 0.0%（EFI Solar 3） → after 100.0%（EFI Solar 1）, 100.0%（EFI Solar 2）, 100.0%（EFI Solar 3）
Funding arrangementsThe construction costs for the power generation facilities of this SPC are expected to be funded through loans using the Group's operating funds and project financing procured in Korea. However, no specific arrangements have been decided at this time.
Impact on Business PerformanceThe impact on the Company's consolidated results for the fiscal year ending December 2026 is currently under review. If disclosure becomes necessary, the Company will make a timely disclosure.
Date of board resolution11 May 2026
Contract Date11 May 2026
Execution Date / Effective Date11 May 2026
Management structure after acquisitionFollowing the acquisition, this SPC is expected to outsource to Eco Network the management of EPC (engineering, procurement and construction) activities and operations and maintenance (O&M) after completion.
Items this document does not state (18)
Net Sales of the Subject CompanyOperating Profit of the Subject CompanyNet Income of the Subject CompanyNet Assets of the Subject CompanyMerger ratio/share exchange ratioTender offer priceMinimum number of shares to be purchasedTender offer periodGoodwill amountAmount of extraordinary income (loss)Valuation methodologyIndependent valuation institutionSpecial CommitteeConditions Precedent to ExecutionNet sales of the target companies (supplementary information)Operating income of the target companies (supplementary information)Net income of the target companies (supplementary information)Net assets of the target companies (supplementary information)

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

To bring into the Group from the early stages the business of constructing and operating solar power plants in Korea, and to apply the expertise in solar power plant construction and operation that the Group has developed in Japan. In addition, as the first project for expanding into Asian markets using the Korean market as a foothold, the Company aims to complete construction and achieve stable operation of the power plants by leveraging the expertise and track record of both the Company and Eco Network.

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(Progress on Disclosed Matter) Notice Regarding the Acquisition of Shares in a Special-Purpose Company Related to a South Korean Solar Power Generation Business (Making It a Consolidated Subsidiary) | Environment Friendly Holdings Corp. (3777) timely disclosure | Komori