Bloomberg News

Olympus Pledges $3.3 Billion Debt Cut, Seeks Bank Support

November 17, 2011

(Updates with bank lobby’s comment in fourth paragraph.)

Nov. 17 (Bloomberg) -- Olympus Corp., the endoscope maker being investigated for alleged accounting irregularities, pledged to cut debt by 256.6 billion yen ($3.3 billion), according to a document distributed yesterday at a meeting held to win support from banks.

The company said it will reduce interest-bearing debt to 408.7 billion yen by March 2015, from 665.3 billion yen at the end of September, according to a copy of the document obtained by Bloomberg News. Tsuyoshi Kitada, a Tokyo-based Olympus spokesman, declined to comment.

Olympus revealed last week that it used the purchase of Gyrus Group Ltd. and three other takeovers to cover up losses on investments dating back decades. Olympus President Shuichi Takayama yesterday met officials from financial institutions including Mitsubishi UFJ Financial Group Inc.

“If something that could harm the community is found in a company’s activity, that company’s main creditors would then refrain from giving further financial support,” Katsunori Nagayasu, head of the Japanese Bankers Association, said today at his monthly press briefing. Nagayasu is also chief executive officer of Japan’s biggest lender, Mitsubishi UFJ.

Japan’s three largest banks had a combined 235.2 billion yen of long-term loans outstanding to Olympus as of March 31, according to the medical equipment and camera maker’s June 29 financial statement. Olympus shares have lost 63 percent of their market value since Oct. 14, when Chief Executive Officer Michael Woodford was fired after confronting former Chairman Tsuyoshi Kikukawa about over-sized payments the company made to advisers.

Mitsubishi UFJ dispatched several of its officials to the meeting yesterday, said Shinya Matsumoto, a spokesman for Japan’s biggest publicly traded bank. He declined to comment on what was discussed at the gathering. Masako Shiono, a spokeswoman for Mizuho Financial Group Inc., the country’s third-largest bank by market value, also declined to comment.

--Editors: James Gunsalus, Russell Ward

To contact the reporters on this story: Takako Taniguchi in Tokyo at ttaniguchi4@bloomberg.net; Shigeru Sato in Tokyo at ssato10@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net


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