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August 12, 2005 – Leica AG, the German camera manufacturer, has reached a settlement with four of its major shareholders that will allow the company to proceed with a crucial stock offering. The company announced earlier this week that such an offering will hopefully raise capital to help the company overcome its current loss and refocus its efforts on its digital camera line.
After settling out of court with the major shareholders, among them Paris’s Hermès International SCA, Leica announced that it will proceed with an offering of 13.5 million new shares at a price of 1.7 euros a share ($2.11). The announcement comes as Leica struggles with a 15.5 million euro loss and decreasing sales of its high end digital cameras.
Leica has recently emerged from a restructuring that saw the installation of a new chairman in April, Dr. Josef Spichtig. Spearheaded by Spichtig, the company plans to trim its inventory and work on the development of new cameras in partnership with other companies rather than relying on in-house research and development. "As we all know, digital technologies have already been developed and are available on the market," Spichtig said.
Leica provides the optical technology included on some of Panasonic’s Lumix cameras, but in the announcement said that it would like to develop a new line of compact digital cameras to expand its offerings above the current M and R lines. The company also announced that following the restructuring, it plans to achieve a global sales volume of over 100 million euros. Sales last year fell 21 percent to 93.7 million euros.