Showa Denko K K : Announcement Regarding Issuance of New Shares and Secondary Offering of Shares

	August 23, 2021
To whom it may concern
Name of Listed Company:	Showa Denko K.K.
Code Number:	4004 TSE First Section
Name of Representative:	Kohei Morikawa, President & CEO
Contact:	Yunia Kagawa
	General Manager
	CSR & Corporate Communication Office
	TEL [phone]

Announcement Regarding Issuance of New Shares and Secondary

Offering of Shares

Showa Denko K.K. (the "Company") hereby announces that its board of directors has resolved matters relating to the issuance of its new shares and the secondary offering of shares on August 23, 2021, as set forth below.

With the aim to establish a leading position in the semiconductor materials market, and to achieve sustainable and strong growth, the Company believes that it is critical to focus its strategic investment in the Electronics area at this moment. The Company will take advantage of this capital raising to strengthen the financial flexibility which supports proactive strategic investments, and will pursue the enhancement of long-term corporate value.

1. Issuance of new shares by way of public offering

(1)	Class and number	of 32,665,500 shares of common stock of the Company, the
	shares to be offered	aggregate of (i) through (iii) described below:
		(i)	16,830,000 shares of common stock of the Company,
			issued for purchase by the Japanese Underwriters in the
			Japanese Public Offering, described in (4)(i) below;
		(ii)	13,770,000 shares of common stock of the Company,
			issued for purchase by the International Underwriters in
			the International Offering, described in (4)(ii) below; and
		(iii)	A maximum of 2,065,500 shares of common stock of the
			Company, additionally issued for purchase by the

International Underwriters upon exercise of the option, described in (4)(ii) below.

Note: This press release does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. The securities referred to in this press release have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "Securities Act"). The securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. The securities referred to above will not be publicly offered or sold in the United States.

1. Method of determination of amount to be paid in
2. Amount of stated capital and additional capital reserves to be increased
3. Method of offering

The amount to be paid in will be determined on a day in the period between September 6, 2021 (Mon) and September 8, 2021 (Wed) (such date, the "Pricing Date") in accordance with the method set forth in Article 25 of the Regulations Concerning Underwriting of Securities, etc. promulgated by the Japan Securities Dealers Association (the "JSDA").

The amount of stated capital to be increased shall be half of the maximum increased amount of stated capital, as calculated in accordance with the provisions of Article 14, Paragraph 1 of the Rules of Account Settlement of Corporations, with any fraction less than one yen resulting from the calculation being rounded up to the nearest one yen. The amount of additional capital reserves to be increased shall be the amount obtained by subtracting the amount of stated capital to be increased from the maximum increased amount of stated capital.

The Japanese offering and the international offering shall be made simultaneously.

1. Japanese Public Offering:
   The offering to be made in Japan (the "Japanese Public Offering") shall be a public offering, and several Japanese underwriters (collectively, the "Japanese Underwriters"), in which three of the Japanese Underwriters act as the Japanese joint lead managers and joint bookrunners, shall underwrite and purchase all of the new shares with respect to the Japanese Public Offering.
2. International Offering:

In the offering to be made outside of Japan (with the offering in the United States restricted to sales to Qualified Institutional Buyers under Rule 144A of the U.S. Securities Act of 1933) (the "International Offering"), the aggregate number of shares shall be severally and not jointly purchased by several international underwriters (the "International Underwriters" and collectively with the Japanese Underwriters, the "Underwriters"). Among the International Underwriters, three will act as the international joint lead managers and joint bookrunners. The Company shall also grant the International Underwriters the option to purchase additional newly issued shares of common stock, as described in (1)(iii) above.

With regard to the number of shares to be offered in (i) and (ii) above, the number of shares to be issued is planned to be 16,830,000 shares for the Japanese Public Offering and 15,835,500 shares for the International Offering (13,770,000 shares to be purchased by the International Underwriters initially in (1)(ii) above and 2,065,500 additional shares to be purchased upon exercise of the option in (1)(iii) above). However, the final breakdown shall be determined on the Pricing Date by taking into account market demand and other

Note: This press release does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. The securities referred to in this press release have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "Securities Act"). The securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. The securities referred to above will not be publicly offered or sold in the United States.

		conditions.
		The issue price (the offer price) with regard to each of (i) and (ii)
		above shall be determined in accordance with the method
		stated in Article 25 of the Regulations Concerning Underwriting
		of Securities, etc., of the JSDA, on the Pricing Date based on
		the preliminary pricing terms calculated by multiplying the
		closing price in regular trading of the shares of common stock of
		the Company on the First Section of the Tokyo Stock Exchange,
		Inc. on the Pricing Date (or, if no closing price is quoted, the
		closing price of the immediately preceding date) by between
		0.90 and 1.00 (with any fraction less than one yen being
		rounded down), taking into account market demand and other
		conditions.
		The global coordinator for the Japanese Public Offering, the
		International Offering and the offering mentioned below in "2.
		Secondary offering of shares (secondary offering by way of
		over-allotment)" shall be one of the Japanese Underwriters (the
		"Global Coordinator") and the co-global coordinators shall be
		two of the Japanese Underwriters.
(5)	Consideration for	The Company shall not pay any underwriting commissions to
	underwriters	the Underwriters, although the aggregate amount of the
		difference between (a) the issue price (the offer price) in each
		offering and (b) the amount to be paid in to the Company by the
		Underwriters shall constitute proceeds to the Underwriters.
(6)	Subscription period (in	The subscription period shall be from the business day
	Japanese Public Offering)	immediately following the Pricing Date to the second business
		day following the Pricing Date.
(7)	Payment date	The payment date shall be any day in the period from
		September 13, 2021 (Mon) to September 15, 2021 (Wed),
		provided, however, that such day shall be the fifth business day
		following the Pricing Date.
(8)	Subscription unit	100 shares

1. The amount to be paid in, the amount of stated capital and capital reserves to be increased, the issue price (the offer price), and any other matters necessary for the issuance of new shares through the Japanese Public Offering and the International Offering shall be determined at the discretion of Representative Director, President of the Company.
2. The Japanese Public Offering shall be subject to the registration taking effect under the Financial Instruments and Exchange Act of Japan.

Note: This press release does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. The securities referred to in this press release have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "Securities Act"). The securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. The securities referred to above will not be publicly offered or sold in the United States.

2. Secondary offering of shares (secondary offering by way of over-allotment) (See "Reference" item 1. below)

(1)	Class	and	number of	2,524,500 shares of common stock of the Company.
	shares to be sold	The number of shares mentioned above is the maximum
				number of shares to be sold. The above number may decrease,
				or the secondary offering by way of over-allotment itself may be
				cancelled, depending on market demand and other conditions.
				Furthermore, the number of shares to be sold shall be
				determined on the Pricing Date, taking into account market
				demand and other conditions in the Japanese Public Offering.
(2)	Seller			A Japanese Underwriter
(3)	Selling price		Undetermined (The selling price shall be determined on the
				Pricing Date; provided, however, that such selling price shall be
				the same as the issue price (the offer price) in the Japanese
				Public Offering
(4)	Method	of	secondary	Taking into account market demand and other conditions for the
	offering			Japanese Public Offering in "1. Issuance of new shares by way
				of public offering", the Seller will make a secondary offering in
				Japan of the maximum of 2,524,500 shares that it borrows from
				a certain shareholder of the Company.
(5)	Subscription period	The subscription period shall be the same as the subscription
				period in the Japanese Public Offering.
(6)	Delivery date		The delivery date shall be the business day immediately
				following the payment date in the Japanese Public Offering.
(7)	Subscription unit	100 shares

1. The selling price and any other matters necessary for the secondary offering by way of over- allotment shall be approved at the discretion of Representative Director, President of the Company.
2. The secondary offering by way of over-allotment shall be subject to the registration taking effect under the Financial Instruments and Exchange Act of Japan; provided, however, that if the Japanese Public Offering is cancelled, the secondary offering by way of over-allotment shall be cancelled as well.

3. Issuance of new shares by way of third-party allotment (See "Reference" item 1. below)

(1)	Class and number of 2,524,500 shares of common stock of the Company.
	shares to be offered

1. Method of determination of the amount to be paid in

The amount to be paid in shall be determined on the Pricing Date; provided, however, that such amount to be paid in shall be the same as the amount to be paid in stated in "1. Issuance of new shares by way of public offering" above.

(3)	Amount of stated capital The amount of stated capital to be increased shall be half of the

Note: This press release does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. The securities referred to in this press release have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "Securities Act"). The securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. The securities referred to above will not be publicly offered or sold in the United States.

	and capital reserves to be	maximum increased amount of stated capital, as calculated in
	increased	accordance with the provisions of Article 14, Paragraph 1 of the
		Rules of Account Settlement of Corporations with any fraction
		less than one yen resulting from the calculation being rounded
		up to the nearest one yen. The amount of the capital reserves to
		be increased shall be the amount obtainable by subtracting the
		amount of stated capital to be increased from the maximum
		increased amount of stated capital.
(4)	Allottee	A Japanese Underwriter
(5)	Subscription period	October 12, 2021 (Tue)
(6)	Payment date	October 13, 2021 (Wed)
(7)	Subscription unit	100 shares

1. Shares not subscribed for within the subscription period in (5) above shall not be issued.
2. The amount to be paid in, the amount of stated capital and capital reserves to be increased, and any other matters necessary for the issuance of new shares by way of third-party allotment shall be determined at the discretion of Representative Director, President of the Company.
3. The Issuance of new shares by way of third-party allotment shall be subject to the registration taking effect under the Financial Instruments and Exchange Act of Japan; provided, however, that if the Japanese Public Offering is cancelled, the issuance of new shares by way of third- party allotment shall be cancelled as well.

Reference

1. The secondary offering by way of over-allotment

The secondary offering by way of over-allotment in "2. Secondary offering of shares (secondary offering by way of over-allotment)" above is a secondary offering of shares of common stock of the Company in Japan to be made in conjunction with the Japanese Public Offering in "1. Issuance of new shares by way of public offering" above for a number of shares not to exceed 2,524,500 shares, that will be borrowed by a Japanese Underwriter from a certain shareholder of the Company (the "Borrowed Shares") taking into account market demand for the offerings and other conditions. The number of shares in the secondary offering by way of over-allotment is expected to be 2,524,500 shares, which indicates the maximum number of shares to be sold, and depending on market demand and other conditions such number may decrease, or the secondary offering by way of over- allotment may be cancelled.

In connection with the secondary offering by way of over-allotment, the board of directors of the Company has resolved on August 23, 2021 (Mon) that the Company will issue up to 2,524,500 shares of its common stock necessary to return the Borrowed Shares to the certain shareholder, by way of third-party allotment to a Japanese Underwriter (the "Third-Party Allotment") with the payment date set to be October 13, 2021 (Wed).

Note: This press release does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. The securities referred to in this press release have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "Securities Act"). The securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. The securities referred to above will not be publicly offered or sold in the United States.