Toshiba seals deal to sell chip unit

The Myanmar Times - Weekend - - International Business -

TOSHIBA Corp. signed a deal Thurs­day to sell its chip unit to a Ja­pane­seus-south Korean con­sor­tium for 2 tril­lion yen ($17.8 bil­lion/k24.24 tril­lion), end­ing a pro­longed bid­ding process and tak­ing a ma­jor step to­ward re­struc­tur­ing.

The Ja­panese tech­nol­ogy con­glom­er­ate an­nounced last week it was selling Toshiba Mem­ory Corp. to the con­sor­tium led by US in­vest­ment fund Bain Cap­i­tal, re­ject­ing a coun­ter­bid from its long­time part­ner Western Dig­i­tal Corp.

The con­sor­tium also in­cludes the state-backed In­no­va­tion Net­work Corp. of Ja­pan, the De­vel­op­ment Bank of Ja­pan, South Korean chip­maker SK Hynix Inc. and four US tech­nol­ogy firms Ap­ple Inc., Dell Inc., mem­ory prod­uct maker Kingston Tech­nol­ogy Corp. and data stor­age com­pany Sea­gate Tech­nol­ogy Plc.

With the sale of its chip busi­ness, Toshiba aims to cover mas­sive losses in­curred by its bank­rupt US nu­clear unit and boost its fi­nan­cial stand­ings. Toshiba will be delisted from the Tokyo Stock Ex­change if it does not elim­i­nate its neg­a­tive net worth by next March.

Toshiba is in a race against time, with po­ten­tially lengthy an­titrust screen­ings ahead in ma­jor mar­kets. The process usu­ally takes six months or more.

“Toshiba in­tends to close (the deal) by the end of March 2018,” Toshiba said in a state­ment re­leased Thurs­day.

The sale is ex­pected to boost Toshiba’s fi­nan­cial stand­ings by some 740 bil­lion yen after tax­a­tion and help it claw its way out of ex­ces­sive li­a­bil­i­ties.

Last month Toshiba said that it fell into neg­a­tive net worth of 552.9 bil­lion yen at the end of fis­cal 2016, and posted a record 965.66 bil­lion yen group net loss for the year, the largestever for a Ja­panese man­u­fac­turer.

The sales de­ci­sion by the Toshiba board came after it con­sid­ered a re­vised last-minute of­fer by a group led by Western Dig­i­tal, the joint owner of Toshiba’s Yokkaichi flash mem­ory plant in cen­tral Ja­pan.

Western Dig­i­tal has taken Toshiba to court claim­ing selling the chip unit without its con­sent would breach their joint ven­ture con­tract.

Toshiba Mem­ory is the world›s sec­ond-largest chip maker fol­low­ing in­dus­try leader Sam­sung Elec­tron­ics Co. of South Korea.

The com­bined global mar­ket share by rev­enue of Toshiba Mem­ory and SK Hynix, which is ranked fifth, was nearly 30 per­cent in 2016, ap­proach­ing Sam­sung’s roughly 35 per­cent, ac­cord­ing to re­search firm IHS Markit.

Bain Cap­i­tal is set to hold a press con­fer­ence later in the day. – Ky­odo

The logo of Toshiba Corp. is seen at its head­quar­ters in Tokyo, Ja­pan on Au­gust 10. Photo: EPA

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