Toshiba to further delay financial report

Paterniano Del Favero
Giugno 24, 2017

Financially troubled Toshiba chose a Japan-backed consortium as the preferred bidder for its memory business, despite Western Digital's continuing claims that no sale can happen without its SanDisk subsidiaries' consent.

Toshiba has announced that it has picked a winning bid for the sale of its memory division, but joint venture partner Western Digital is still seeking an injunction to block the sale.

Western Digital claimed Korea-based chipmaker SK Hynix is also part of the consortium trying to buy the Toshiba memory business.

If SK hynix secures at least half of Toshiba's shares, it will immediately grow to become the second-largest player in the NAND market, although it is more likely to only take over 15 percent of the combined stake in the consortium. "Without a complete overhaul of its organization, Toshiba will have a very hard road to recovery of its reputation and trust, essential ingredients to its existence", said Shuri Fukunaga, chief executive of Burson-Marsteller Japan, a communications consultancy firm that helps companies in crises. Such sales can be sensitive because they involve the transfer of technology. It will provide half of the 850 billion yen ($7.6 billion) that Bain plans to put up in the form of financing, sources have said.

It also said that it had received approval from regulators for an extension to file its annual earnings.

Toshiba would be willing to hold talks but does not expect the composition of the preferred bidder consortium, which includes Bain Capital and Japanese government investors, to change before June 28, Chief Executive Satoshi Tsunakawa told a news conference.

The company's shareholders had expected the results for the financial year to March 31 by the end of this month, but Toshiba has been granted an extension until August 10 to allow time for ongoing bankruptcy proceedings against its Westinghouse nuclear reactor business in the US.

Toshiba's woes stem mainly from Westinghouse, which has filed for Chapter 11 bankruptcy in the US, which may have overpaid - by several billion dollars - for another nuclear construction and services business.

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