Toshiba Seeks Min­i­mum $8.8 B in Chip Stake Sale

The Economic Times - - Around The World -

Tokyo: Toshiba Corp is look­ing to raise at least 1 tril­lion yen ($ 8.8 bil­lion) from the sale of its mem­ory chip busi­ness and will aim to com­plete the trans­ac­tion by March 2018, ac­cord­ing to a per­son fa­mil­iar with the mat­ter.

The deal will likely re­sult in Toshiba re­lin­quish­ing ma­jor­ity con­trol over the unit, which could be val­ued as high as 2 tril­lion yen, the per­son said, ask­ing not to be iden­ti­fied as the mat­ter is pri­vate. The com­pany wants to take time ne­go­ti­at­ing the best price pos­si­ble with­out set­ting a con­crete dead­line, al­though it aims to reach an agree­ment be­fore the end of the next fis­cal year, ac­cord­ing to the per­son. A Toshiba spokesman de­clined to com­ment.

Toshiba is grap­pling with a $6.3 bil­lion write­down at its nu­clear di­vi­sion, which is suf­fer­ing mas­sive cost over­runs in the con­struc­tion of nu­clear power plants in the US a n d Chi n a . Las t week, Pres­i­dent Satoshi Tsunakawa said sell­ing a ma­jor­ity stake in the com­pany’s highly-prized flash mem­ory chips busi­ness may be in­evitable to shore up its bal­ance sheet. Lo­cal me­dia in­clud­ing the Sankei news­pa­per re­ported the fundrais­ing tar­get ear­lier on Tues­day.

The icon of Ja­panese busi­ness is likely to be de­moted from the first tier of the Tokyo Stock Ex­change to the sec­ond sec­tion as a re­sult of its de­te­ri­o­rat­ing fi­nances. A per­son fa­mil­iar with the mat­ter told Bloomberg last week the com­pany sees no way of avoid­ing de­mo­tion since li­a­bil­i­ties al­ready ex­ceed as­sets. Rather than try­ing to meet ex­change re­quire­ments by the end of the cur­rent fis­cal year in March, Toshiba will in­stead take its time in ne­go­ti­at­ing the best deal pos­si­ble for its share­hold­ers and em­ploy­ees, ac­cord­ing to the per­son. South Korea’s SK Hynix Inc. has pub­licly ex­pressed in­ter­est in the Toshiba chip busi­ness.

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