TOKYO, June 20 /Xinhua-PRNewswire-FirstCall/ -- Prospect Asset Management, Inc. (Honolulu, Hawaii) Shareholders today voted in favor of the proposal by AZEL Corporation (Ota-ku, Tokyo; Securities Code: 1872) to elect new Directors to the Board of AZEL. Three seasoned professionals who were until recently senior executives of the Prospect Group have today been elected to the Board of AZEL, as follows: Mr. Tadashi Furue, President and Representative Director; Mr. Yasushi Yoda, Deputy President and Representative Director; and, Mr. Hamilton Smith, Senior Managing Director.
Background of Cooperative Relationship between AZEL and the Prospect Group
The cooperative relationship between the Prospect Group and AZEL started in June 2004, when AZEL embarked on a period of corporate reorganization and the Prospect Group established an equity share in AZEL.
With regard to a then robust Japanese real estate market and potential further improvements in AZEL’s operating performance, the Prospect Group subsequently increased its stake to where it became AZEL’s largest shareholder.
In the second half of 2007, Japan’s real estate and financial markets deteriorated significantly due to the impact of the sub-prime loan crisis in the United States and the global reduction in risk appetite for real estate related securities. Buffeted by this harsh business environment, on March 13, 2008 AZEL announced a downward revision of its business results forecasts for the fiscal year ended March 31, 2008.
Against this backdrop, and to work toward achieving sustainable growth, AZEL proposed the election to its Board of highly experienced Directors dispatched by the Prospect Group. Looking ahead, AZEL, in conjunction with the Prospect Group, is committed to increasing its earnings for the benefit of all stakeholders.
Future Collaborative Arrangements with AZEL
As a long-term shareholder, the Prospect Group has maintained an ongoing dialog with AZEL’s management, dating back to the time of its initial investment in AZEL.
The Prospect Group recognizes that challenging conditions facing AZEL may well persist in the immediate period ahead. The Group also considers that there are limitations to AZEL’s heretofore business strategy and its focus principally on organic growth. For these reasons, Prospect held discussions with AZEL’s management based on the premise that new measures to reenergize the company’s Board of Directors are essential to future business revitalization. These discussions have included AZEL’s proposal to elect to AZEL’s Board of Directors highly capable new Directors dispatched by the Prospect Group.
Going forward, the Prospect Group will support AZEL in its undertakings to enhance corporate value, strengthen core businesses, secure greater efficiencies through reviews of underperforming activities, and improve profitability. In addition to the dispatch of executives to AZEL’s Board of Directors, this support will encompass a range of financial as well as business measures. Capitalizing on its network of industry contacts, the Prospect Group also plans to introduce potential candidates for business tie-ups and M&A.
About the Prospect Group
Prospect Co., Ltd. (KKP) (Marunouchi, Tokyo; Curtis Freeze, Chairman) is licensed to perform both investment advisory and real estate investment management business in Japan, and has a real estate investment team as well as an equity research team. KKP is the parent company of three companies in the Prospect Group, namely: Prospect Asset Management, Inc. (PAMI) (Honolulu, Hawaii), which is registered as an investment adviser under the United States Investment Advisers Act of 1940, as amended, with Securities and Exchange Commission number 801-47749; Prospect Asset Management (Channel Islands) Ltd. (PAMCI), which is registered as an asset management company with the Island of Guernsey, pursuant to an Act of the Royal Court of the Island. PAMCI, together with affiliate PAMI, manages approximately US$925 million (estimate as of January 31, 2008) in assets distributed among a variety of funds and managed accounts; and Prospect Residential Advisors (PRA), which is registered with the Prime Minister’s Office as a REIT asset management company under license number 38. It launched a listed JREIT in July 2005, the Prospect Residential Investment Corporation (Securities Code: 8969), comprising 54 buildings valued at a total of JPY 74.3 billion as of January 31, 2008.
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