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A man passes behind a logo of Japan's Olympus Corp at the company headquarters in Tokyo June 19, 2012.
Credit: Reuters/Yuriko Nakao
Thu Aug 9, 2012 3:32am EDT
TOKYO (Reuters) - Japan's Olympus Corp suffered a further deterioration in its ability to meet financial obligations as quarterly earnings slumped, adding pressure on the scandal-hit company to enter into a capital deal.
Shareholders' equity fell to 2.2 percent of total assets in June from 4.6 percent in March, the company said on Thursday. That takes Olympus further away from the 20 percent level widely regarded by analysts as indicative of financial stability.
Olympus needs a capital injection before its business year ends in March 2013, Senior Executive Managing Officer Yasuo Takeuchi told reporters at a briefing.
The 93-year-old manufacturer of cameras and medical equipment has held talks with several Japanese companies including FujiFilm Holdings and Sony Corp on a capital tie-up as it tries to mend its severely depleted balance sheet hit by a massive accounting scandal last year.
Olympus booked a 60 percent slump in operating profit to 2.12 billion yen ($27.05 million) for April-to-June as an operating loss at its camera division and a stronger yen offset a profit gain at its medical equipment division.
The company kept its full-year operating profit forecast at 50 billion yen.
Olympus posted a net loss of 49 billion yen in the year ended March 31, after admitting in November to a decade-long scheme of falsifying financial statements and hiding investment losses.
The company has promised investors it will boost its shareholders' equity ratio to 30 percent in five years. To raise it to 10 percent, Olympus said it needs to find some 50 billion yen in fresh capital.
Sources familiar with the matter have said Olympus is in final talks with Sony to accept a cash injection in return for a stake, while medical device maker Terumo Corp said last month it is seeking to form a joint holding company with Olympus as part of a 50 billion-yen capital infusion plan.
Olympus maintained on Thursday that it is in talks with several companies on financial support.
In an unusual turn of events, Terumo slapped its potential partner with a lawsuit last week for failing to disclose its accounting fraud before signing a business and capital tie-up with the medical equipment maker seven years ago.
In a regulatory filing on Thursday, Olympus said it expects creditors to continue providing loans despite the fact that misreported financial statements in the past meant it had violated covenants on some loans.
Shares in Olympus settled 2.2 percent lower before the earnings announcement. Tokyo's benchmark Nikkei average rose 1.1 percent. ($1 = 78.3600 Japanese yen)
(Reporting by Mari Saito; Editing by Ryan Woo)
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