Toshiba unable to meet March-end deadline for chip unit sale to Bain-led consortium

Failure to meet the deadline gives Toshiba the option of walking away from the sale of the world’s No. 2 producer of NAND chips without penalty - a move that some investors have urged it to consider.
Toshiba agreed last year to sell the chip unit to a consortium led by US private equity firm Bain Capital to cover liabilities arising from its bankrupt US nuclear unit Westinghouse.(Reuters Fle Photo)
Toshiba agreed last year to sell the chip unit to a consortium led by US private equity firm Bain Capital to cover liabilities arising from its bankrupt US nuclear unit Westinghouse.(Reuters Fle Photo)
Published on Mar 30, 2018 04:13 PM IST
Copy Link
Reuters, Tokyo | By HT Correspondent

Toshiba Corp said on Friday it would not be able to complete an $18 billion deal to sell its prized chip unit by an agreed deadline at the end of March, as it had not received an anti-monopoly approval from China.

Failure to meet the deadline gives Toshiba the option of walking away from the sale of the world’s No. 2 producer of NAND chips without penalty - a move that some investors have urged it to consider.

But the company said in a statement that it still plans to sell the unit, aiming to finalise the deal as soon as possible.

Toshiba agreed last year to sell the chip unit to a consortium led by US private equity firm Bain Capital to cover liabilities arising from its bankrupt US nuclear unit Westinghouse.

But the conglomerate no longer needs the funds as much, having raised $5.4 billion from a share issue to foreign investors late last year.

Some activist shareholders oppose the sale, saying the $18 billion price tag undervalues the business and that Toshiba should renegotiate with the Bain group or consider an initial public offering.

The chip business currently accounts for most of the company’s profit, and Toshiba is struggling to grow other core businesses such as social infrastructure.

Under the deal, it plans to repurchase 40% of the chip unit.

SHARE THIS ARTICLE ON
Close Story
SHARE
Story Saved
OPEN APP
×
Saved Articles
My Reads
Sign out
New Delhi 0C
Tuesday, October 19, 2021