Olympus Declines After Saying It May Sell Shares: Tokyo Mover
Olympus Corp. (7733), the Japanese camera maker that admitted to a $1.7 billion accounting fraud, fell the most in a month in Tokyo trading after saying it may consider selling shares in the market to raise capital.
Olympus dropped 4.1 percent, the biggest decline since May 7, to 1,244 yen on the Tokyo Stock Exchange. Japan’s benchmark Nikkei 225 Stock Average rose 2 percent.
The company is considering fundraising measures that may include a strategic alliance or selling shares in the market, as it seeks to boost its capital ratio to more than 30 percent by March 2017, President Hiroyuki Sasa said after the market closed on June 8. Olympus needs to shore up capital after writing down the value of assets because of a 13-year accounting fraud exposed by former President Michael Woodford.
“The company needs to boost capital and form an alliance to rebuild itself,” Makoto Sengoku, a Tokyo-based market analyst at Tokai Tokyo Securities Co., said today by phone. Sasa’s comment about selling shares in the market “is triggering the drop” in trading today, he said.
Olympus, the world’s biggest maker of endoscopes, may post net income of 7 billion yen ($88 million) this fiscal year, it said in a statement on June 8. That compared with the 25 billion yen average of four analyst estimates compiled by Bloomberg. Operating profit may be 50 billion yen for the year ending March 31, compared with the 63.4 billion yen average of analyst estimates.
The Tokyo-based camera maker also said it plans to eliminate 2,700 jobs by March 2014. Olympus had 39,727 employees, including contract workers, as of March 2011, according to Tsuyoshi Oshima, a company spokesman.
Most of the jobs being cut are in overseas manufacturing, Sasa said on June 8. The company will close a plant in the Philippines this year and will reorganize others, it said in the statement.
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