Olympus says tie-up offers under consideration, cuts jobs
TOKYO (Reuters) - Japan's Olympus Corp (7733.T) said on Friday it is considering tie-up offers from at least five domestic firms to bolster its precarious capital position, and will shed jobs and plants, in an attempt to recover from a $1.7 billion accounting scandal.
The president of the medical equipment and camera maker, Hiroyuki Sasa, said at a briefing Fujifilm (4901.T), Panasonic Corp (6752.T), Sony Corp (6758.T) and Terumo Corp (4543.T), as well as at least one other Japanese firm, had made capital alliance offers but Olympus had made no decision on a deal.
"We have not decided on the partner. We are in talks with all of them in the same way," Sasa told the conference, where the firm unveiled its five-year business plan.
The world's leading diagnostic endoscope maker last year admitted it used improper accounting to conceal huge investment losses under a scheme that began in the 1990s, after sacked British CEO Woodford raised concerns in October about dubious book-keeping.
Woodford was fired two weeks into the CEO job in October after persistently warning about corruption at the top echelons of the company.
Olympus consequently revised its financial statements for the five years to end-June 2011. It reported a net loss of 49 billion yen ($615.81 million) and a 7.5 percent fall in its operating profit to 35.5 billion yen for the year ended March 2012.
Several key figures in the scandal, including former president Tsuyoshi Kikukawa, have been charged, but the firm has managed to stay listed and its key endoscope business continues to perform well, factors which may have encouraged Olympus not to seek a quick deal.
"A capital tie-up is not the only way to raise capital, so we are considering various ways," President Sasa said.
JOB CUTS, ASSET SALES
Olympus said on Friday it will pay Woodford 10 million pounds ($15.58 million) in settlement of his claim for unfair dismissal, bringing an end to their eight-month dispute.
In its five-year business plan, Olympus will aim to sell peripheral businesses and cut the number of factories to 18 from the current 30, it said. The company calls the medical, life and industrial sciences, and imaging divisions as its core businesses.
Olympus will also shed 2,700 jobs, or 7 percent of its total workforce, mostly overseas in its manufacturing operations. It will spend a total of 15 billion yen over the five years for the restructuring.
The firm said it plans to bring its camera business back to profitability in the current financial year ending March 2013, while aiming to nearly double its operating profit for its medical business in five years to 126 billion yen.
The steps, Olympus said, will help boost its shareholders' equity ratio, a key measure of capital stability, by roughly seven-fold to 30 percent in five years, above the 20 percent level widely regarded as indicative of financial stability for a company.
Olympus shares ended down 3.6 percent on Friday ahead of the announcements. They had slumped as much as 80 percent after the accounting fraud unfolded in October, but have since recovered to about half of the pre-scandal level, valuing the company at around 365 billion yen ($4.6 billion).
(Editing by Muralikumar Anantharaman)