* Sony will gain a seat on Olympus board -sources
* Sony and Olympus to establish joint medical equipment unit
* S&P downgrades Sony debt rating to BBB on weak consumer
(Adds detail of S&P downgrade in paragraphs 4-5)
By Reiji Murai and Maki Shiraki
TOKYO, Sept 25 Sony Corp will likely
approve a plan this week to invest 50 billion yen ($642 million)
in cash-strapped Olympus Corp, becoming its biggest
shareholder with around a 10 percent stake, three sources
familiar with the deal told Reuters.
Sony will set up a joint business with Olympus to develop
new medical equipment, and next year will send an executive to
join its board of directors, the sources said on condition they
not be identified.
Sony wants to nurture new businesses, including medical
equipment, to increase revenue as it draws back from loss-making
Persistent weakness in its consumer electronics prompted
Standard & Poor's to cut Sony's long-term debt rating one notch
on Tuesday to BBB, the second-lowest investment grade. S&P added
that it would lower its rating further unless the inventor of
personal music players improved its financial standing.
The cut will make it more expensive for Sony to borrow money
to finance investment and acquisitions.
Olympus, seeking to retain a high degree of independence,
may favor a capital injection from Sony rather than offers of
closer business ties from rivals such as medical device maker
Terumo Corp and camera maker Fujifilm Holdings Corp
Rocked by an accounting scandal over falsified financial
statements and hidden investment losses, camera and endoscope
maker Olympus needs cash to fix its finances. In the year to
March 31, it booked a net loss of 49 billion yen.
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.
An allotment of new shares to Sony in October should raise
the ratio to 10 percent, the sources said.
($1 = 77.8750 Japanese yen)
(Additional reporting by Taiga Uranaka; Writing by Tim Kelly;
Editing by Michael Watson and Edmund Klamann)