Olympus to raise $1.3bn in new capital

City A.M. Reporter
Olympus Corp is preparing to issue about $1.28bn (£825.22m) in new shares with Japanese high-tech stalwarts Sony and Fujifilm seen as likely buyers as it tries to bolster its depleted finances, the Nikkei business daily reported.

The report on the sale, which the Nikkei said could take the form of preferred shares, follows a warning from one of the camera and endoscope maker's top foreign shareholders that the scandal-tainted board may try to retain control by issuing new shares to dilute the power of existing shareholders.

Olympus shares jumped following the report, as worries about share dilution from capital raising were offset by the potential benefits for the company's financial health.

Olympus last week announced restated accounts for the past five years as it struggles to sort out a $1.7bn accounting scandal dating back to the 1990s, whittling its net assets down to just 45.9 billion yen (£379.2m).

The company also reported a 32.33bn yen net loss for the half-year to 30 September, although its diagnostic endoscope business, which holds a dominant 70 per cent share of the global market, remains a strong cash earner.

The Nikkei said Olympus was believed to be considering issuing preferred shares that would not carry voting rights, although they would eventually be convertible into common stock.

Panasonic Corp may also acquire some of the stock, the report said, with details of the new share issuance due to be finalised by next month.

Olympus said it had made no decisions about capital raising and would consider all options as it proceeds with managerial reforms, while Sony and Fujifilm declined to comment.