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July 26, 2007

Promise Co., Ltd.
Sanyo Shinpan Finance Co., Ltd.


Promise Co., Ltd. ("Promise," Representative Director:  Hiroki Jinnai) and Sanyo Shinpan Finance Co., Ltd. ("Sanyo Shinpan," Representative Director:  Mutsuhiko Matsumoto) hereby announce that it has been resolved at the meetings of the Board of Directors of the respective companies held today (July 26, 2007) to implement a tender offer (the "Tender Offer") for the shares of Sanyo Shinpan by Promise and to enter into a management integration of both companies.


1.  Purpose of the Management Integration

            Promise has mainly engaged in consumer financing services providing individual customers with unsecured and unguaranteed small loans since its establishment in March 1962.  Since 1999, with "the evolution of the personal main banker" as its company vision ("Promise Vision"), the Company has actively developed its infrastructure and business practices in order to be selected and preferred by its customers, including the improvement of its network, development of the most safe and secure financial instruments, and enhancement of its customer service.  In 2004, Promise formed a strategic alliance in capital and services with Sumitomo Mitsui Financial Group, Inc. ("SMFG"), and based on the affiliation, launched an unsecured personal loan business in April 2005 with Sumitomo Mitsui Banking Corporation ("SMBC") and At-Loan, a subsidiary of Promise.

            Since its establishment in October 1959, Sanyo Shinpan has expanded its consumer financing services focusing primarily on west Japan, such as in the Kyushu and Chugoku areas.  Since 1999, Sanyo Shinpan has initiated a full-scale business in eastern Japan.  In April 2001, Sanyo Shinpan made Mycal Card Inc. (currently known as Pocketcard Co., Ltd.) its subsidiary and has promoted diversification of financial services including a credit card business, guarantee services and a servicing business, and consequently, these businesses have contributed to Sanyo Shinpan's consolidated operating results.

            However, the business environment for the consumer financing services industry to which Promise and Sanyo Shinpan belong has seen major changes due to the December 2006 enactment and promulgation of the money lending business related laws which, among other things, reduced the maximum interest rate under the Law for the Control of Acceptance of Contributions, Money Deposits and Interest, etc. (the "Capital Subscription Law"), and regulated total credit amounts, raising concerns about industry restructuring or shakeouts.  In recent years, as part of a legal adjustment of debts, claims for repayment of interest on loans in which such interest exceeded the limits provided in the Capital Subscription Law have increased.  Such claims are a factor behind an increase in bad-debt write-offs and have put heavy strain on consumer credit company revenues.

            In response to the increasingly severe business environment, Promise and Sanyo Shinpan began efforts to fundamentally reform their cost structure through means such as channel restructuring and personnel reduction, and began taking steps towards ensuring a new revenue base.  We believe that the integration of the operating base of both companies will have synergistic effects and will enable a dynamic response to the changes in the business environment and a dynamic approach to both companies' growth strategies.  Promise and Sanyo Shinpan continue to discuss the business strategies of the new group formed as a result of the management integration, and are developing useful financial instruments and services that will enhance customer convenience, and publicly affirm their belief that the combined entity will become a leading company in the industry in terms of customer base, brand strength and strategy.  In addition, we intend to take advantage of the integration to further enhance cooperation with the SMFG and SMBC groups.


2.  Policies Regarding Management and Corporate Restructuring, etc.

            Promise and Sanyo Shinpan intend to implement fundamental operational reforms through the management integration to realize synergies as described below, and establish a new operational system to realize sustainable growth under a new operating environment.

Expansion of the operating base

     As a result of the integration of both companies' groups, Promise and Sanyo Shinpan will have approximately 2 trillion yen in total loans receivable outstanding on a consolidated basis, and will be the largest business group in the consumer financing services industry.  Since Sanyo Shinpan is dominant in the Chugoku and Shikoku areas, we believe that the rate of overlapping customers between the two companies is relatively low.  We also expect that this integration will cause expansion of our customer base as well as an increase in our outstanding loans receivable.

     Furthermore, Sanyo Shinpan is currently performing a tie-up with 168 financial institutions engaged in the credit guarantee business, and has established know-how, a strong brand and good relationships with its affiliates.  We believe that we will be able to stabilize our revenue base by strengthening our guarantee business by utilizing Sanyo Shinpan's above-mentioned ability to expand into new businesses such as financing services to companies.

Implementation of a cost cutting plan

     Although Promise and Sanyo Shinpan have already announced and launched their own respective cost cutting plans, we expect to have more efficient reforms of the cost structure through our joint efforts to achieve synergies by (i) cutting costs through reductions in overlapping manned stores and unmanned stores, (ii) cutting costs through integration and intensification of business operations and integration of headquarters' management functions and (iii) reducing costs for system development and operation.

Development of the new group's business strategy after the management integration

     In order to develop a new revenue base, Promise has entered into new businesses like management of internet shopping malls and automobile-related services that have arisen from consumers' fund settlement needs.  Promise has also established a comprehensive finance company called "Do Financial Service Co., Ltd.," and is directly addressing consumers' fund settlement needs while developing and expanding a business model that provides various financial services.

     At the same time, Sanyo Shinpan, through its group company Pocketcard Co., Ltd., has know-how, a strong brand name and a broad customer base in the consumer credit business.

     Although we intend to develop specific action plans later, we believe that the integration of two companies providing various financial services will lead to an expanded customer base and increased profitability of the whole group.


3.  Other

            Please see the press release "ANNOUNCEMENT OF COMMENCEMENT OF TENDER OFFER FOR SHARES" issued by Promise today and "ANNOUNCEMENT OF ENDORSEMENT OF TENDER OFFER FOR SHARES" issued by Sanyo Shinpan today for details of the Tender Offer for shares.


This news release has been translated from the original Japanese document released on July 26, 2007, for reference only.

In the event of any discrepancy between this translated document and the original Japanese document, the original document shall prevail.


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