Sony to Invest $642 million in Olympus

While last week was replete with news of Sony’s financial trouble, sources have recently told a leading news agency that Sony Corp is likely to approve a plan to invest 50 billion yen in cash-strapped Olympus Corp sometime this week. With this investment, Sony will become the biggest shareholder with an approximate 10 percent stake.

Sony is going to set up a joint business with Olympus to develop new medical equipment. It might have an executive join the board of directors at Olympus sometime next year, the sources said on condition of anonymity. Sony plans to nurture new businesses to increase revenue to move away from loss-making televisions.

Amidst all this, Olympus is seeking to retain independence because of which it is favouring capital investment from Sony instead of trying to garner closer business ties from rivals such as medical device maker Terumo Corp and camera maker Fujifilm Holdings Corp.

Olympus was troubled by an accounting scandal over falsified financial statements and hidden investment losses and booked a net loss of 49 billion yen last year. In June its ratio of shareholders’ equity to total assets fell to 2.2 percent, from 4.6 percent in March. The figure is a barometer of a company’s liquidity, with the 20 percent level regarded as indicative of financial stability.

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