Olympus Corp's former CEO Woodford speaks to a reporter upon his arrival at Haneda airport in Tokyo
Olympus Corp's former CEO Michael Woodford (2nd L) speaks to a reporter upon his arrival at Haneda airport in Tokyo December 13, 2011. REUTERS

Japanese camera maker Olympus Corp beat the deadline for an automatic delisting after it reposted five years of earnings, which showed a $1.1 billion loss and ignited merger speculation.

The 92-year old company's statement showed a dramatic decrease in assets - only 46 billion yen compared to 225 billion yen in 2007 - and a net loss of more than 32 yen in the past six months. Its weakened state means that the company needs to raise capital or risk a takeover, according to one analyst.

The company might consider recapitalization because 46 billion yen is a very small amount of equity, Nanako Imazu, an analyst at CLSA in Tokyo, told Reuters. Any significant change in earnings to the downside or any significant change in the yen versus the dollar or the euro is a big risk.

Fujifilm and Hoya have both been rumored to be potential buyers, but for now Olympus is looking to try to raise capital on its own. Olympus President Shuichi Takayama has previously said he'd consider selling off assets to keep the company afloat.

Most probably Olympus has to increase capital. It's best for the company to merge with others rather than rebuild by itself, Ryosuke Okazaki, chief investment officer at ITC Investment Partners, told Reuters.

The Japanese company has seen its value drop substantially since it admitted in October to falsifying accounts for 13 years. It currently is facing investigations from law enforcement agencies from Japan, the United States, and the United Kingdom.

The company barely made the deadline to avoid an automatic Tokyo Stock Exchange delisting, but could still be delisted after a review. The TSE has placed the company on its watch list and could still remove it if other issues come up.

The regulation unit is still investigating the misrepresentations in the reports and we have not decided when we'll announce the conclusion, said Kazuyuki Miyaji, manager of the TSE's disclosure division.

The news came out after Olympus dismissed chief executive officer Mike Woodford and the fired executive went public with concerns about past Olympus' mergers and acquisitions.

Olympus executives were inflating fees and overpaying for companies in order to create goodwill for the company. The scandal crippled the company's stock value and set up a potential board proxy fight.

Woodford has assembled a list of backers as he tries to get his old job back, but some remaining in the company would like to see a completely fresh start. Woodford believes he could probably win a board proxy fight, but that it would break down to Japanese versus foreign investors.

The 51-year old Briton has the support of some major foreign investors, including Southeastern Asset Management.

Olympus needs a credible board with independent directors providing oversight of the clean-up and company revamp, Josh Shores, a principal at Southeastern Asset Management, told Reuters. The involvement of Mr. Woodford will be a strong sign that the fix will be done in a thorough and transparent manner positioning Olympus for a strong future.

The Olympus board has stated it will resign once a succession plan has been established, but that it would like to chose its successors.