Toshiba board to approve plans to split off chip business on Friday: source

Tue Jan 24, 2017 6:06am EST
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By Taro Fuse

TOKYO (Reuters) - Toshiba Corp's (6502.T: Quote) board will meet on Friday to approve plans to make its chip business a separate company and hopes to raise more than 200 billion yen ($1.8 billion) by selling a 20 percent stake in it, a person with direct knowledge of the matter said.

The sale is part of the conglomerate's efforts to avoid being crippled by an upcoming multi-billion dollar writedown for its U.S. nuclear business, although it would not completely offset a charge that other sources have said may exceed $4.4 billion.

Some domestic media have said the writedown could be as much as $6 billion.

Toshiba declined to comment on plans for its chip business but said earlier on Tuesday that it will unveil the extent of the writedown on Feb. 14 when it reports third-quarter results.

"We will explain the reasons why this occurred to the nuclear business and offer measures to prevent a repeat of the incident," it said in a statement.

Toshiba is rushing to raise funds by the end of the financial year in March as a massive writedown could wipe out shareholders equity that has shrunk to just $3 billion in the wake of a 2015 accounting scandal.

Toshiba estimates the value of its chip business - the world's second-biggest NAND flash memory producer after Samsung Electronics (005930.KS: Quote) - at 1 trillion yen to 1.5 trillion yen ($8.8 billion to $13.2 billion), the person with direct knowledge of the matter said.

Chief Executive Satoshi Tsunakawa told Toshiba's main creditors of the plans when visiting them earlier on Tuesday, said the person, who was not authorized to discuss the matter publicly and declined to be identified.   Continued...

The logo of Toshiba Corp is seen behind trees at its headquarters in Tokyo, Japan January 23, 2017.    REUTERS/Toru Hanai