Industry Brief : Olympus May Request $1.3 Billion in New Capital, Sony and Fujifilm Possible Buyers

December 21, 2011

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Tokyo, Japan—Scandal-ridden and financially beleaguered Olympus Corporation, according to the Nikkei business daily, is planning to issue about $1.28 billion in new shares to bolster its depleted operating cash, “with Japanese high-tech stalwarts Sony and Fujifilm seen as possible buyers,” reported Reuters.

The Nikkei report follows a warning from one of Olympus’s leading shareholders that the board may try to retain control by issuing new shares to dilute the power of existing shareholders.

“Some people are obviously seeing that this will add to its net assets and contribute to the financial health of the company and increase the value of the company,” said Masayoshi Okamoto, head of dealing at Jujiya Securities, after Olympus shares saw a surge following four straight sessions of decline.

Olympus has been struggling since October to sort out a $1.7 billion accounting scandal that dates back to the 1990s, which eroded its net assets to just 45.9 billion yen ($588.9 million).

The Nikkei said the camera and endoscope maker, which holds a 70% of the global endoscope market, “was believed to be considering issuing preferred shares that would not carry voting rights, although they would eventually be convertible into common stock.”

Panasonic may also acquire some of the stock, the Nikkei reported, adding, “Olympus said it had made no decisions about capital raising and would consider all options as it proceeds with managerial reforms.” According to Reuters, Sony and Fujifilm declined to comment. olympus.com

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