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 Benesse Corporation today announced that it has concluded a basic agreement with AVIVA Japan Corporation (Tsuneo Makino, CEO; AVIVA Japan) and the Industrial Revitalization Corporation Japan (Atsushi Saito, CEO; IRCJ) to begin specific discussions related to rehabilitation assistance for AVIVA Japan. Details are as follows.

1.Overview of Basic Agreement
(1)Background to Application by AVIVA Japan for Assistance
AVIVA Japan operates a chain of personal computer schools as its core business. As of December 31, 2004, AVIVA Japan had a total of 330 classrooms nationwide, making it the largest company in its field. Supported by factors such as rising demand from people seeking to improve their IT skills and acquire related qualifications, as well as the Training and Education Benefits System launched by the Japanese government, AVIVA Japan steadily increased new enrollment for its classes. However, following an overhaul of the Training and Education Benefits System in May of 2003, AVIVA Japan experienced a marked decline in the number of new students enrolling. Significant advertising investment aimed at stemming this decline subsequently failed to have the intended result, leaving the company in a weakened position.

Faced with this situation, AVIVA Japan and Resona Bank, Limited have resolved to dissolve high levels of interest-bearing debt, and in conjunction with this move, AVIVA Japan has applied to IRCJ for business restructuring assistance with Benesse as its sponsor.

(2)Business Reorganization
Proposed business structure accompanying rehabilitation assistance:
(i)The entire operations of AVIVA Japan will be transferred to an assignee company in which Benesse holds an investment of no less than 95%. The former AVIVA Japan is then expected to swiftly begin winding up its business.
(ii)The assignee company will begin the planned disposal of all non-core operations.

(3)Business Plan
Proposed business plan accompanying rehabilitation assistance:
(i)"Select and concentrate" businesses
(ii)Reduce advertising expenses
(iii)Improve classroom profitability
(iv)Strengthen management structure

(4)Overview of Financial Assistance
Benesse plans to seek financial assistance from financial institutions and other bodies totaling approximately 3.9 billion yen (debt waivers).

2.Overview of AVIVA Japan
(1)Company Name
AVIVA Japan Corporation

(2)Representative
Tsuneo Makino

(3)Main Office
23-7, Meieki 3-chome, Nakamura-ku, Nagoya-shi

(4)Business
Operation of multiple format classrooms, satellite broadcasting, business planning and development, business management and individualized instruction

(5)Established
1979 (Meikyo Co., Ltd.)

(6)Capital
38 million yen

(7)Employees
1,567 (As of December 31, 2004)

(8)Major Shareholders and Holdings
-Tsuneo Makino
No. of Shares Held :75,800
Ratio of All Issued Shares :99.74%
-Hiromitsu Makino
No. of Shares Held :200
Ratio of All Issued Shares :0.26%

(9)Recent Business Results

Fiscal Year Ended December 2002
Net Sales : 20,860 million yen
Gross Profit on Sales : 20,540 million yen
Operating Income : 238 million yen
Ordinary Income : 305 million yen

Fiscal Year Ended December 2003
Net Sales : 20,694 million yen
Gross Profit on Sales : 20,097 million yen
Operating Loss : (1,674) million yen
Ordinary Loss : (1,867) million yen

3.Impact on Forecasts
The transfer of AVIVA Japan's operations to the assignee company is scheduled to take place on April 1, 2005. Consequently, it will have no impact on the results for the current fiscal year. Future forecasts will reflect the content of AVIVA Japan's business rehabilitation plan as details become clearer.