RNS Number:2102K
Kobe Steel Ld
22 April 2003

NEWS RELEASE

                                                                Kobe Steel, Ltd.
                                                   Tokyo Stock Exchange No. 5406

                                                         Genesis Technology Inc.

                                          Nikko Principal Investments Japan Ltd.



Management Buyout of Genesis Technology



TOKYO (April 22, 2003) - Kobe Steel, Ltd. (TSE: 5406) and Nikko
Principal Investments Japan Ltd. (NPI), a wholly owned subsidiary of Nikko
Cordial Corporation (TSE: 8603), have agreed that Kobe Steel transfer 20,800
shares (65 percent of the outstanding shares) of its wholly owned subsidiary
Genesis Technology Inc. (GTI) to NPI's special-purpose company GTI Holdings,
Inc. for 3.5 billion yen on April 25.  Simultaneously, GTI's current bank loan
will be refinanced by a syndicated loan in the way a typical leveraged buyout is
structured. Upon closing, GTI will be no longer consolidated to Kobe Steel's
financial statements. It aims to further grow an independent semiconductor
testing house and go public in the near future.



The transaction is featured as a management buyout. GTI's management will
acquire a portion of GTI's shares, while Kobe Steel will continue to support GTI
as its second largest shareholder.



GTI provides semiconductor manufacturers with testing services and is not only
one of the largest in Japan but also one of the leading players worldwide.
Established in December 1987, GTI started out as an affiliate of Kobe Steel.
Kobe Steel increased its equity in GTI through private placements, acquiring the
portions held by other shareholders, and fully acquired GTI' outstanding shares
in November 1999.



Following an outsourcing trend in the semiconductor industry, GTI's business
steadily expanded over the years, with testing facilities in Iruma-gun, Saitama;
Nishiwaki, Hyogo; and Hayami-gun, Oita.  Sales in the year ended in March 2003
are expected to reach 11 billion yen.



Kobe Steel has been allocating its resources under a policy of "selection and
consolidation" to strengthen its profit base.  Following this policy, in 2001
Kobe Steel withdrew from semiconductor manufacturing.  As a result, GTI's
operations now have relatively small synergies to those of the Kobe Steel Group.
However, as the outsourcing trend in semiconductor testing is expected to
continue, Kobe Steel and GTI management have decided to go for a management
buyout of GTI following NPI's proposal.  As an independent company, GTI will be
able to increase the speed of its decision-making and implement a management
system that matches the characteristics and size of the business. These changes
are anticipated to enable GTI to continue to grow, expediting the way to go
public.



NPI is a subsidiary of the Merchant Banking Division of The Nikko Cordial Group.
  Similar to its sister company Nikko Principal Investments Limited in England,
NPI, dedicated to principal investment, invests Nikko's own 100 billion yen
capital on a mid-to-long term perspective in private companies and the remaining
equity portion, following successful debt re-financing and potentially including
the use of securitization.  NPI has a considerable track record in raising
corporate value, based on its extensive in-depth financial expertise and
support.  As an MBO partner, NPI aims to help GTI expand its business.



Genesis Technology Inc.

Location               Nishiwaki, Hyogo Prefecture
President              Yuzo Miura
Established            December 1987
Capital                1.9 billion yen
Employees              540
Business               Semiconductor testing services, semiconductor assembly



Nikko Principal Investments Japan Ltd.

Location               Tokyo
President & CEO        Hirofumi Hirano
Established            March 2000
Capital                2.5 billion yen
Business               Merchant banking business, including private equity
investment



Management Buyout (MBO)

In a management buyout, the management or employees of a business unit or
subsidiary acquire the shares of the business and its management rights in order
to continue that business as an independent entity.  An outside financial
sponsor commonly serves as the MBO partner and provides financing for the
acquisition, as does the management of the business unit.  After the MBO, the
financial sponsor collaborates in the business development of the new company.





Media Contacts:



Gary Tsuchida
Kobe Steel, Ltd.
Tokyo, Japan
Tel (03) 5739-6010



Akihiro Koto
Genesis Technology Inc.
Nishiwaki, Japan
Tel (0795) 23-6842



Toshiharu Masuzoe
Nikko Principal Investments Japan Ltd.
Tokyo, Japan
Tel (03) 3500-0178






                      This information is provided by RNS
            The company news service from the London Stock Exchange
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