Olympus Corp., the world’s biggest maker of endoscopes, plans to raise as much as 118 billion yen ($1.2 billion) in an overseas share sale and spend almost half the funds on research and development at its medical unit.
The camera maker will sell as many as 41 million shares, amounting to 12 percent of the stock outstanding after the sale, in markets including the U.S. and Europe, Tokyo-based Olympus said in a statement today. The proceeds will also be used for capital spending and the remaining funds may be spent to repay debt, Olympus said.
Olympus plans to expand its medical unit after a 13-year accounting fraud disclosure wiped off $1.3 billion from its balance sheet. The company’s ratio of equity to total assets recovered to 15.5 percent as of March 31 from 2.2 percent in June last year after Sony Corp. agreed to invest 50 billion yen.
“We received several proposals that there’s high demand from institutional investors overseas,” Sam Kobayashi, a spokesman for Olympus in Tokyo, said by telephone today.
Olympus will sell 32 million new shares, 4 million shares it owns and grant underwriters an option to offer an additional 5 million shares. The stock will be priced as early as July 18, the company said. The price announced today was calculated based on the closing price of July 4, which was 3,120 yen a share, according to a separate regulatory filing to the finance ministry today.
Olympus plans to spend 54 billion yen on R&D at the medical unit, 24 billion yen for promoting new medical products, 19.7 billion yen for boosting production capability of existing plants in Japan and the remaining funds may be used to repay debt, according to the statement.
Olympus hired UBS AG, Morgan Stanley and SMBC Nikko Capital Markets Ltd. as underwriters for the offering, according to the filing.
The announcement was made after markets in Tokyo closed. Olympus declined 1 percent to close at 3,095 yen in Tokyo, while the benchmark Topix Index fell 1.4 percent.
Former Olympus President Michael Woodford uncovered the accounting discrepancies and went public with them in 2011 after the Olympus board declined to take action. Reports of the attempts to hide losses in mid-October 2011 triggered an 82 percent drop in the company’s shares between Oct. 13 and Nov. 11, 2011.
The company and three former executives eventually admitted using fraudulent takeover deals to hide losses for 13 years starting in the 1990s. The company was ordered to pay 700 million yen in fines while the three officials received suspended sentences from the Tokyo District Court last week.
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