Japan Energy Corp., the nation’s fifth-largest oil refiner and wholesaler, said Friday that it has suspended talks with Nippon Mining & Metals Co. on creating a joint holding company at the request of the copper smelting subsidiary.
Japan Energy said it made the decision in view of a request by Nippon Mining to suspend the talks so as to clear up “a misunderstanding by parties concerned in the case.”
“It is beneficial for both companies to consider this matter, but we agreed to suspend the talks in light of the request by Nippon Mining until the misunderstanding between the parties concerned is cleared,” Japan Energy said in a statement.
The firm stopped short of referring to the specifics of the misunderstanding.
Japan Energy earlier said it has started talks with Nippon Mining on creating a joint holding company as a way to reorganize their petroleum, metals, electronic materials and other operations to reinforce their earning capacities.
The earlier statement followed a newspaper report Friday morning that the two companies are in the final stages of talks on integrating their operations under a holding company by 2002.
The report sparked a wave of sell orders for Nippon Mining, dragging its stock price down sharply and thereby prompting shareholders of Nippon Mining to complain of the planned integration, which they said could be used as a way to make up for losses in Japan Energy’s ailing petroleum business.
The planned holding company reportedly would have consolidated sales of about 2 trillion yen from oil, metals and electronic materials, convenience stores, engineering and information and other services.
Japan Energy has a 57 percent stake in Nippon Mining. Both firms derive their operations from the same company, Nippon Mining Co.
Nippon Mining merged with Kyodo Oil Co. in December 1992 to create Nikko Kyodo Co., which changed its name to Japan Energy in December 1993.
Nippon Mining was established in May 1992 and took over Nippon Mining’s metal operations in November that year.