TOKYO, Mar 31 (Pulse News Wire) – PATH Corporation (3840.T) announced today that its board resolved to terminate operations initiated in August 2024 with Sanwa Manufacturing Co., dissolve their business partnership, and divest its entire stake in Sanwa Manufacturing to Uni-Rott Corp. As a result, Sanwa Manufacturing will be excluded from PATH's consolidated financial statements effective March 2026.
The move will lead to a special loss in PATH’s fiscal 2026 individual results due to delays in anticipated orders and significant deviations from sales and profit forecasts. Sanwa Manufacturing, established on March 1, 1971, specializes in developing industrial machinery utilizing AI and robotics technology. PATH acquired Sanwa Manufacturing in February 2025 to integrate its unique technologies and enhance synergies within the group. However, ongoing substantial research and development investments by Sanwa Manufacturing have posed challenges to PATH's cash flow and overall performance. Consequently, PATH concluded that external capital management would best support Sanwa Manufacturing's sustainable growth. Details of the stock transfer show PATH held 800 shares (with a voting rights ratio of 100.0%) prior to the transaction.
Following the deal, PATH will hold zero shares (voting rights ratio: ０%). The transfer price was determined through negotiations based on valuation methods recommended by Frontier-M, ensuring fairness and appropriateness. The resolution was made during a board meeting , and finalized with Sanwa Manufacturing's shareholders’ approval on the same day. The share transfer agreement was signed and executed simultaneously. PATH anticipates posting a provision for doubtful debts related to loans extended to Sanwa Manufacturing, amounting to approximately ¥133 million. The impact on PATH’s consolidated earnings for the fiscal year ending March 2026 is currently being assessed.
Moving forward, PATH expects this decision to alleviate future research and development costs and reduce potential losses, contributing positively to the group's financial health.
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