Olympus to issue new shares to up low finance levels: reports
20 Dec 2011
Olympus Corp is in the process of issuing around $1.28 billion worth of new shares, with Japanese high-tech stalwarts Sony and Fujifilm seen as possible buyers, as it tries to raise its depleted level of finances, according to the Nikkei business daily.
The report comes after a warning from one of the top foreign shareholders of the camera and endoscope maker, that that the scandal-hit board might try to retain control with the issue of new shares to dilute the power of existing shareholders. (See: Battle brewing for control of scam-tainted Olympus)
Olympus' shares were up today, after they fell four straight sessions on worries over how capital raising might dilute existing shareholdings, as investors seemed to shift their focus to the firm's finances.
According to analysts, some people were hoping that this would add to its net assets and contribute to the financial health of the company, thus improvingits value.
Last week the company announced restated accounts for the past five years as it struggled to clear up a $1.7-billion accounting scandal dating back to the 1990s, that had cut its net assets down to just ¥45.9 billion.
Olympus also posted a ¥ 32.33 billion net loss for April-September, even as its diagnostic endoscope business, which held a dominant 70 per cent share of the global market, remained a strong cash earner.
According to the Nikkei, Olympus was believed to be considering issuing preferred shares that would not carry voting rights, although they would eventually be convertible into common stock.
