Shares in Olympus Corp seesawed in volatile trade early on Tuesday after a report that the scandal-hit company is preparing to issue about $1.28 billion (825.06 million pounds) in new shares following a sharp downward revision of the group's net assets.

The Nikkei business daily reported that the 92-year-old camera and medical equipment maker is considering issuing nonvoting preferred shares convertible into common stock.

An Olympus spokesman said it had not made any decisions on raising capital.

The shares were down 1.1 percent at 905 yen by 0008 GMT (12:08 a.m. British time), topping the main board as the heaviest traded share by turnover.

(Reporting by Mari Saito)