Olympus president Shuichi Takayama has said the troubled firm may have to enter a tie-up with another company after corrected business results revealed a huge hole in its balance sheet.rnrnPicture: Former CEO Michael Woodford has said that he is against Olympus striking a strategic alliance with another company

Olympus president Shuichi Takayama has said the troubled firm may have to enter a tie-up with another company after corrected business results revealed a huge hole in its balance sheet.

Speaking at a press conference in Tokyo, Takayama told reporters that a merger was one of the options on the table after Olympus was forced to reveal the true state of its business in the wake of a £1.1 billion accounting scandal dating back to the 1990s.

Though camera sales grew 15% for the six months to 30 September 2011, the photo division is expected to show a loss for the full year to 31 March 2012, according to Reuters news agency.

Olympus recorded an overall net loss of 32.22 billion yen (around £270m) for the half year, compared to a 3.81 billion yen (£32m) profit for same period the previous year, state Japanese press reports.

The amended accounts show that Olympus’s net assets fell to 46 billion yen at the end of September 2011, down from a restated 225 billion yen in March 2007.

Former CEO Michael Woodford, who is making a bid to reclaim his old job after exposing the scandal, is against Olympus seeking a strategic alliance, however.

In an interview with Amateur Photographer last month, Woodford (pictured) admitted that consumer electronics is a tough business and there are ‘too many players’ in camera manufacturing.

He added: ‘But Olympus is probably in a better position than most, if the Pen [camera] is an illustration.’

He explained that the Pen E-P3 micro four thirds model holds a leading position in Japan, Korea, Singapore and elsewhere. 

Insisting he has no plans to sell Olympus’s camera business, should he be reinstated by shareholders, Woodford said that the camera division is ‘pretty straightforward’ and sits well alongside the firm’s medical equipment business, with the two sharing ‘a lot of common components’. 

He continued: ‘The distribution channels are very limited so you don’t need a massive infrastructure. 

‘What you need to do is invest in the product, and also to some extent, the brand. 

‘But to me the product is everything. We’ve seen that with the Pen? to get back to 24, 25% [market share] in Japan ? the home of Canon and Nikon is quite remarkable.’

He remained cautious, however: ‘You would be a romantic and a fantasist if you felt this [camera division] was going to be really profitable? But it could be a profitable business and it can utilise the infrastructure of, for example in the UK, KeyMed which is a brilliant company. 

‘It [KeyMed] is essentially one of the jewels in the crown of the Olympus empire, it always has been? the infrastructure is already there.’ 

Woodford explained that you don’t need an ‘HR department’ to make a camera, but stressed Olympus must maintain focus because ‘they [camera and medical] are very different businesses’.

Woodford is this week back in Japan where he is trying to convince investors that he is the best man to take Olympus forward.

Picture: Former CEO Michael Woodford has said that he is against Olympus striking a strategic alliance with another company

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