Olympus 2013 Annual Report Download - page 54

104 OLYMPUS Annual Report 2013 105OLYMPUS Annual Report 2013
(3) Prepayment of Debt of Consolidated Subsidiary
In order to reduce interest-bearing debt from the perspective of fi nancial soundness, Gyrus Group Limited, a consolidated subsidiary of the
Company, made prepayment of debt on May 31, 2013 to The Bank of Tokyo-Mitsubishi UFJ, Ltd.
(1) Amount of prepayment £181 million (¥25,856 million / $275 million)
(Balance as of March 31, 2013: £181 million (¥25,856 million / $275million))
(2) Interest rate 3.78% (Fixed interest rate)
(3) Date of borrowing December 28, 2011
(4) Initial terms of repayment Lump sum repayment
(5) Initial date of repayment March 19, 2015
(6) Date of prepayment May 31, 2013
(7) Expenses related to prepayment £9 million (¥1,252 million / $13 million)
(8) Interest saved by prepayment £12 million (¥1,761 million / $19 million)
40. Supplemental Information
(1) Future Circumstances
Following the Company’s announcement on November 8, 2011 concerning its deferral of recognition of losses on securities investments, in-
vestigations by domestic and overseas investigative authorities, supervisory bodies and other public bodies (including those in the U.K. and
the U.S.) have been launched and remain underway. The consolidated fi nancial statements may need to be restated depending on the re-
sults of such investigations in the future.
As a result of inappropriate fi nancial reporting by the Company, there is currently a case pending against the Company at Tokyo District
Court for breaches of the Securities and Exchange Act and the Financial Instruments and Exchange Act, and on March 26, 2013, the verdict
in the closing argument of this case is that a fi ne of ¥1.0 billion ($10,638 thousand) should be imposed. Also as a result of inappropriate fi -
nancial reporting by the Company, certain shareholders and shareholder groups, etc. have fi led lawsuits against the Company, and there is a
risk that additional claims or lawsuits may be brought against the Company in the future for similar reasons.
The effect of these events on the fi nancial results of the Company is uncertain since its fi nancial impact is not estimable at this stage.
(2) Legal Claims
A lawsuit has been fi led against the Company. The overview of the lawsuit is as follows.
(1) Date of fi ling lawsuit
July 23, 2012
(2) Plaintiff
1. Company: Terumo Corporation
2. Address: 2–44–1, Hatagaya, Shibuya–ku, Tokyo
3. Representatives: Yutaro Shintaku, President, Representative Director
(3) Content of lawsuit and amount of claim
The Company issued 6,811,000 shares, amounting to a total of ¥14,998 million ($159,553 thousand), to Terumo Corporation
through third party allotment, in accordance with the securities registration statement submitted on August 4, 2005.
Terumo Corporation claims, owing to the Company’s past deferral of the recognition of losses, that false statements on impor-
tant matters were contained in the securities registration statement when such third party allotment was made. Consequently, the
lawsuit was fi led to seek compensation for damages of ¥6,612 million ($70,340 thousand), in accordance with Article 18, Paragraph
1 and Paragraph 2 of the former Securities and Exchange Act and Article 19 of the said Act, which are applied by replacing the
terms pursuant to the provision of Article 23–2 of the said Act.
The amount of compensation for damages claimed consists of ¥6,612 million ($70,340 thousand) and 5% per annum interest
on this amount for the period from August 22, 2005 up to the payment of the principal.
(4) Future outlook
The Company has appointed a lawyer as its counsel for this lawsuit and is seeking dismissal of the claim. The lawsuit’s effect on the
fi nancial results of the Company is uncertain since its fi nancial impact is not estimable at this stage.
39. Subsequent Events
(1) Establishment of Signifi cant Joint Venture
Upon receiving all necessary regulatory approvals, the Company has established a medical business venture company Sony Olympus
Medical Solutions Inc. on April 16, 2013 in accordance with a business and capital alliance agreement with Sony Corporation (“Sony”) exe-
cuted on September 28, 2012.
(1) Purpose of establishment
Sony Olympus Medical Solutions aims to align Sony’s electronics technologies in areas such as digital imaging with Olympus’ manu-
facturing and R&D expertise in the area of medical products including lenses and optical technologies in order to bring high-quality
medical care to as many people as possible and contribute to medical advancement worldwide.
(2) Overview of newly established company
(1) Name Sony Olympus Medical Solutions Inc.
(2) Headquarters Hachioji, Tokyo, Japan
(3) Type of business Manufacture and sales of medical equipment and other equipment
(4) Stated capital ¥50 million ($532 thousand)
(5) Acquisition cost ¥24.5 million ($261 thousand)
(6) Ownership percentage after acquisition Sony 51.0%, Olympus 49.0%
(2) Prepayment of Syndicated Loans
In order to reduce interest-bearing debt from the perspective of fi nancial soundness, the Company made a prepayment of debt on June 26,
2013, based on the agreement on June 18, 2013 with a loan syndicate, with the arranger being The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Further, on June 20, 2013, the Company made an agreement for the prepayments of debt with two loan syndicates, with the arranger
being Sumitomo Mitsui Banking Corporation. The prepayments of debt are scheduled to be made on June 28, 2013.
(1) Syndicated loan (The Bank of Tokyo-Mitsubishi UFJ, Ltd. and 1 other fi nancial institution)
(1) Amount of prepayment ¥12,000 million ($127,660 thousand)
(Balance as of March 31, 2013: ¥12,000 million ($127,660 thousand))
(2) Interest rate 2.69% (Fixed interest rate)
(3) Date of borrowing December 26, 2008
(4) Initial terms of repayment Lump sum repayment
(5) Initial date of repayment December 26, 2013
(6) Date of prepayment June 26, 2013
(7) Expenses related to prepayment ¥104 million ($1,106 thousand)
(8) Interest saved by prepayment ¥162 million ($1,723 thousand)
(2) Syndicated loan (Sumitomo Mitsui Banking Corporation and 21 other fi nancial institutions)
(1) Amount of prepayment ¥27,500 million ($292,553 thousand)
(Balance as of March 31, 2013: ¥27,500 million ($292,553 thousand))
(2) Interest rate 2.51% (Fixed interest rate)
(3) Date of borrowing December 30, 2008
(4) Initial terms of repayment Lump sum repayment
(5) Initial date of repayment December 30, 2013
(6) Date of prepayment (scheduled) June 28, 2013
(7) Expenses related to prepayment ¥193 million ($2,053 thousand)
(8) Interest expected to be saved by prepayment ¥350 million ($3,723 thousand)
(3) Syndicated loan (Sumitomo Mitsui Banking Corporation and 4 other fi nancial institutions)
(1) Amount of prepayment ¥2,500 million ($26,596 thousand)
(Balance as of March 31, 2013: ¥2,500 million ($26,596 thousand))
(2) Interest rate 2.45% (Fixed interest rate)
(3) Date of borrowing January 23, 2009
(4) Initial terms of repayment Lump sum repayment
(5) Initial date of repayment December 30, 2013
(6) Date of prepayment (scheduled) June 28, 2013
(7) Expenses related to prepayment ¥16 million ($170 thousand)
(8) Interest expected to be saved by prepayment ¥31 million ($330 thousand)