Sony (NYSE:SNE) to invest $642-M in Olympus (OTC PINK:OCPNY)
Sony (NYSE:SNE) to invest $642-M in Olympus (OTC PINK:OCPNY)
TRUMY, FUJIY
Sony Corp is likely approve a plan this week to invest 50-B Yen (US$642-M) in cash-strapped Olympus Corp, becoming its biggest shareholder with around a 10% stake.
Sony will set up a joint business with Olympus to develop new medical equipment, and next year will send an executive to join its board of directors.
Sony wants to nurture new businesses, including medical equipment, to increase revenue as it draws back from loss-making televisions.
Olympus seeking to retain a high degree of independence, may favor a capital injection from Sony rather than offers of closer business ties from rivals such as medical device maker Terumo Corp (OTC PINK:TRUMY) and camera maker Fujifilm Holdings Corp (OTC PINK:FUJIY).
Shaken by an accounting scandal over falsified financial statements and hidden investment losses, camera and endoscope maker Olympus needs cash to fix its finances. In the year to 31 March it booked a net loss of 49-B Yen.
In June its ratio of shareholders’ equity to total assets fell to 2.2% from 4.6% in March. The figure is a barometer of a company’s liquidity, with the 20% level regarded as indicative of financial stability.
An allotment of new shares to Sony in October should raise the ratio to 10%.
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