Toshiba shares slide as bigger stake in chip unit up for sale

TOKYO — Shares in Toshiba Corp. skidded on Wednesday after the conglomerate said it would book a $6.3 billion hit to its US nuclear unit and may sell a majority stake in its prized flash-memory chip unit as it scrambles for cash to stay in business.

Facing a March 27 deadline to avoid a delisting, Chief Executive Satoshi Tsunakawa said he would consider selling most, even all, of the chips business — a turnaround from the conglomerate’s previous stance that it would sell only about 20%.

The change of direction has prompted investors to question whether the company would have a long-term future without control of the unit and could well shake up the bevy of suitors interested in a piece of the world’s biggest NAND chip producer after Samsung Electronics Co. Ltd.

Taiwan’s Foxconn, formally known as Hon Hai Precision Industry Co. Ltd, is among the companies and funds that were bidding for the smaller stake, a source with direct knowledge of the offer said, declining to be identified because he is not authorized to talk to the media.

Toshiba’s new openness towards selling more of its chips business comes as the beleaguered conglomerate failed to deliver fully audited third-quarter earnings as scheduled on Tuesday, instead saying it needed more time to look at potential problems at its Westinghouse division. The expected $6 billion writedown will also wipe out shareholders’ equity.

Toshiba shares slid to be down 8% in afternoon trade. The company’s market value has shrunk to ¥895 billion ($7.8 billion), less than half its value in mid-December. Just under a decade ago, the firm was worth almost ¥5 trillion. —