Toshiba to hold chip unit deal un­til July 28 court hear­ing

Muscat Daily - - BUSINESS -

Tokyo, Ja­pan - Toshiba Corp, whose sale of its chip unit is be­ing chal­lenged in court by man­u­fac­tur­ing part­ner Western Dig­i­tal Corp, agreed to hold off clos­ing the deal un­til a hear­ing on July 28.

Toshiba will pro­ceed with ne­go­ti­a­tions and con­tract sign­ing in the mean­time, the Tokyo-based com­pany said in a state­ment. The two com­pa­nies were in court in the US on Fri­day for a hear­ing on Western Dig­i­tal’s re­quest for a pre­lim­i­nary in­junc­tion to block the sale. The Su­pe­rior Court of Cal­i­for­nia sug­gested the com­pa­nies work on a pro­posal for pro­vid­ing Western Dig­i­tal with two weeks’ ad­vance no­tice of the sale and didn’t rule on the US com­pany’s in­junc­tion re­quest.

The re­la­tion­ship be­tween the two com­pa­nies has de­te­ri­o­rated as Toshiba moves to com­plete the sale of its flash-mem­ory di­vi­sion by March. While Toshiba needs to raise cash to keep afloat fol­low­ing losses in its nu­clear di­vi­sion, Western Dig­i­tal has sought to block the deal on con­cerns the chip unit may end up with com­peti­tors. What­ever the court rules on July 28, the com­pa­nies face ar­bi­tra­tion pro­ceed­ings that will ul­ti­mately de­ter­mine which pre­vails.

Toshiba said Cal­i­for­nia Su­pe­rior Court Judge Harold Kahn pro­posed a ‘fi­nessed’ al­ter­na­tive to a pre­lim­i­nary in­junc­tion, while Western Dig­i­tal said the hear­ing amounted to court pro­tec­tion.

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