Major shareholder cuts stake in scandal-hit Olympus

 
City A.M. Reporter
One of Olympus Corp's top shareholders, Nippon Life Insurance, cut its stake in the scandal-hit Japanese firm but signalled it would remain as an investor in the company, citing its strong core business and technology.

Olympus, which makes cameras and medical equipment, is being investigated by police, prosecutors and regulators after admitting this month to hiding investment losses for decades and using payments linked to acquisitions to aid the cover-up.

Nippon Life, which cut its holding to 5.11 per cent from 8.18 per cent, said it had done so due to uncertainties surrounding the company but would still back the firm.

"Our basic stance is that we will continue to support Olympus due to the company's high technological strength in its core business and because it is in the public's interest," said Akira Tsuzuki, an official at Nippon Life.

Olympus, which employs nearly 40,000 people, is the global leader in endoscopes and its optical technology may have defence applications.

Olympus may sell assets to help pay down $3.4bn (£2.1bn) in debt under a plan aimed at keeping the support of its banks, the Nikkei business daily said. Their backing is vital because the firm is relatively highly geared and is expected to have to make some hefty writedowns after its accounts are put straight.

The once-proud company put forward the debt-reduction proposal at a meeting with creditors on Wednesday, offering to cut its debt by about 260 billion yen ($3.4 billion) over the next three years, the Nikkei said.

The paper quoted a senior banker as saying Olympus did not face any imminent cash crunch.