Panasonic to provide Olympus with up to R5.3bn

Panasonic Corp is making final arrangements to provide up to 50 billion yen ($635 million) in capital to scandal-hit Olympus Corp, Kyodo news agency reported on Wednesday, a move that will make Panasonic the company’s top shareholder.

Olympus, the world’s leading maker of diagnostic endoscopes, is struggling to recover from a $1.7 billion accounting fraud uncovered last year by its then-CEO, Michael Woodford.

Local media last week reported that Olympus planned to shed 2,500 workers and sell an equity stake to either Sony Corp or Panasonic Corp to bolster its finances.

Panasonic, a leading electronics maker, has been hobbled by losses in its TV business, but there has been speculation that it is interested in expanding into the healthcare industry, which offers more stable revenues.

Panasonic aims to secure a new source of revenue by forming an alliance with Olympus in its mainline operation, Kyodo reported, quoting unidentified sources. Olympus, it said, would get access to funds for its restructuring as well as to marketing resources.

According to the sources, Olympus will issue shares to Panasonic in a private offering and the two companies are discussing a stake valued at 30 billion to 50 billion yen.

Both Olympus and Panasonic declined to comment on the report.

Meanwhile shares of Olympus Corp rose 3.3 percent to 1,374 yen on Wednesday after Kyodo news agency said Panasonic Corp is making final arrangements to provide up to 50 billion yen ($635 million) in capital to the scandal-hit firm.

The move will make Panasonic the top shareholder in Olympus, which has been hit by a massive accounting scandal.

Panasonic shares were up 0.6 percent, in line with the benchmark Nikkei share average.

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Panasonic to provide Olympus with up to R5.3bn