Recovery of Investment and Reduction of Holding Risk through the Securitization of Moominvalley Park Real Estate

「As the Company's voting ownership interest in ㈱ムーミン物語 declined as a result of the series of transactions described above, ㈱ムーミン物語, its subsidiary Hanno Regional Resources Utilization Godo Kaisha, and Metsä 2 Investment Limited Partnership were excluded from the scope of consolidation from the interim consolidated fiscal period.」

「At Metsä Village, we will promote additional development of Nordic-themed accommodation, bathing and other facilities involving capital investment on the order of more than ¥1 billion, with a targeted opening during 2027.」

「Metsä Village (MV) will be securitized after its value is enhanced. The Company is considering installing accommodation and bathing facilities to make MV a higher-value-added facility. After further enhancing its appeal through redevelopment, the Company is considering securitization using security tokens.」

「Metsä has entered the recovery phase, and the Company anticipates obtaining exit opportunities for its corporate investment in ㈱ムーミン物語 and its asset investment in Metsä Village through the value enhancement of Metsä as a whole.」

「In March 2019, the Company raised ¥942 million for interior and exterior construction costs at Moominvalley Park through a sale-and-leaseback transaction.」

「In investment banking, the number of completed transactions followed an upward trend as the Company provided solutions to companies requiring business succession through M&A-related services. In real estate asset management, success fees from the partial sale of assets under management were recognized as sales. In asset investment, which involves the Company's proprietary investments and loans in real estate and other assets, investment recoveries increased sales year on year, while in corporate investment, an impairment loss on investments in venture capital funds resulted in a valuation loss on investment securities held for operating purposes.」

「The theme park facility, or real estate, planned by Hanno Regional Resources Utilization Godo Kaisha is treated as a theme park facility of ㈱ムーミン物語 because the commencement of leasing under the fixed-term building lease agreement entered into by the company and ㈱ムーミン物語 resulted in accounting treatment as a transfer-of-ownership finance lease transaction.」

「In asset investment, the Company securitized real estate adjacent to Metsä and recorded sales of ¥256 million and operating income of ¥195 million. It also recorded sales of ¥432 million from the sale of managed real estate while pursuing new investments.」

「In asset investment, although there were no sales related to renewable energy power plants, which were recorded in the second quarter of the previous fiscal year, the securitization of land adjacent to Metsä and real estate sales and asset management generated sales of ¥256 million and operating income of ¥195 million.」

「Although there were no sales related to renewable energy power plants, which were recorded in the first quarter of the previous fiscal year, asset investment recorded sales of ¥255 million from the securitization of land adjacent to Metsä, and the gross profit margin on sales improved.」

「To enable Metsä to develop as a facility rooted in the local community, the Company entered into a real estate sale and purchase agreement with its subsidiary, Hanno Regional Resources Utilization Godo Kaisha, a special-purpose company, to securitize the Moominvalley Park real estate.」

「The Company decided to securitize the real estate at Moominvalley Park and, on 14 July 2017, transferred the real estate to a regional SPC for ¥2 billion, recovering part of its investment. The regional SPC decided to raise ¥6.35 billion through investments and loans from regional financial institutions, local companies and ㈱ムーミン物語 to secure most of the development funding. Through this real estate securitization, the Company separated Moominvalley Park from the Company, the owner of the underlying assets, and made it a bankruptcy-remote "public asset" that would contribute to the development of the local community, supporting the formation of a lasting community. Meanwhile, because the Company made the regional SPC a subsidiary, the transfer of the real estate in this securitization was not recognized as revenue under accounting rules, but the Company recovered its investment on a cash basis and reduced the risks associated with holding the real estate as part of its risk management. The Company plans to continue recovering its investment through real estate securitization.」