Published By : 03 Aug 2017 | Published By : QYRESEARCH
Toshiba Corp., the giant Japanese conglomerate, has stalled its plans for selling its memory chip business as of now, which has increased the concerns over how fast it can close the hole in the multi-billion balance sheet that has been left by its U.S. nuclear business collapse. The company is the second-largest manufacturers of NAND chips across the world and its chips and devices business held nearly the one-third of its overall sales in the previous financial year.
In early 2017, Toshiba made an announcement about its plans to sell off its chip business in order to pay the debts and normalize the impact of the US$6.33 bn write-down and the liabilities related to Westinghouse, its U.S. nuclear arm. Shareholders also approved this plan in March 2017. The company picked up a consortium that included the Japanese government funds, Bain Capital, a private equity firm, and SK Hynix, a South Korea-based chip vendor as the most preferred bidder. However, Western Digital, a rival bidder, which conjointly invests in the Japanese company’s primary chip plant, has taken Toshiba to the court, stating that it required Western Digital’s consent for the sale to take place.
The fight has scared the government-backed funds and they are up with their demand that Toshiba resolves the conflict prior to the sale. The other point of disagreement has been a proposal laid by SK Hynix in an effort to assist them in funding the deal with convertible bonds, which can eventually provide it with an equity interest. However, the Japanese government funds do not want the South Korean company to gain a management stake.