Date
23 March 2017
Toshiba shares tumbled 9 percent on Wednesday after the company said it would book a US$6.3 billion hit to its US nuclear unit. Photo: Reuters
Toshiba shares tumbled 9 percent on Wednesday after the company said it would book a US$6.3 billion hit to its US nuclear unit. Photo: Reuters

Toshiba may delay chip auction, eyes majority stake sale

Toshiba Corp. may delay the sale of its prized flash-memory chip unit after the conglomerate said it would consider selling most, even all, of the marquee business, Reuters reports.

“It’s moving in that direction [of a delay],” a source said Wednesday on condition of anonymity as the discussions were not public. As Toshiba’s plans for the sale have changed, “the bidders are having various thoughts”.

The TVs-to-nuclear conglomerate is scrambling for cash to stay in business as a multi-billion-dollar hole has emerged in recent months in its nuclear business.

Toshiba shares sank 9 percent on Wednesday after the company said it would book a US$6.3 billion hit to its US nuclear unit and would consider selling more than the originally planned stake of less than 20 percent of the flash-memory chip business.

Changing the rules of the chip auction, which sources have said has generated bids of 200-400 billion yen (US$1.8-US$3.5 billion), could push the sale beyond Toshiba’s planned deadline of the March 31 end of the business year, the source said.

Loosening the deadline would ease concerns about trying to hurry any antitrust reviews, increasing the number of potential buyers and potentially improving the offers, he said.

Toshiba has accepted that it may remain in negative net worth through the end of the business year, the source said, which could see its shares demoted to the second section of the Tokyo Stock Exchange. As a result, the source said, it would have to convince its lenders to keep the funds coming.

The result could also be a rethink of the whole auction as some bidders may now want management rights or have other responses to Toshiba throwing open the bidding to include a majority stake, he said.

The change of direction by Toshiba — facing a March 27 deadline to avoid a delisting — 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.

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CG/RA

 

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