‘Fox­conn not favoured due to close ties with China’

New Straits Times - - Business -

Tai­wan’s Fox­conn, the world’s largest con­tract elec­tron­ics maker, is not a favoured bid­der for Toshiba Corp’s me­mory chip busi­ness due to its close ties with China, said sources with di­rect knowl­edge of the deal.

The Ja­panese govern­ment was wor­ried that sell­ing to bid­ders close to China might lead to the trans­fer­ence of key tech­nol­ogy, said the sources.

Toshiba was aware of the govern­ment’s wishes and “will take into ac­count how close bid­ders are to China in the se­lec­tion”, said one of the sources, adding that Fox­conn had pro­duc­tion lines in China.

Toshiba is con­sid­er­ing sell­ing the ma­jor­ity — or all — of its mar­quee flash-me­mory chip busi­ness, as it seeks to make up for a write­down from its United States nu­clear unit West­ing­house.

It was valu­ing its chip busi­ness at least 1.5 tril­lion yen (RM50.53 bil­lion), said peo­ple fa­mil­iar with the mat­ter.

Mean­while, West­ing­house had brought in bank­ruptcy at­tor­neys from law firm Weil Got­shal & Manges LLP, said sources.

The move comes af­ter a US$6.3 bil­lion (RM28.1 bil­lion) write­down at West­ing­house wiped out Toshiba’s share­holder eq­uity.

A Chap­ter 11 bank­ruptcy fil­ing by West­ing­house in the United States could help limit Toshiba’s losses, said two peo­ple.

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