Cash-stricken Toshiba is allegedly closing in on a much-needed injection of funds to save it from financial ruin. The Japanese multinational firm is reportedly about to receive backing from the state to save it from bankruptcy. A consortium including the state-backed Innovation Network Corp. of Japan (INCJ) and state-owned Development Bank of Japan (DBJ) is reportedly lining up investing in Toshiba Corp’s memory chip business, according to The Japan Times.
However, conflicting reports are coming out of Japan, with Reuters claiming that the Japanese government is distancing itself from Toshiba Corp completely and will instead share information with Washington on developments involving the firm and its US nuclear unit Westinghouse.
Toshiba had called in bankruptcy lawyers earlier in the week as it struggled to recover from an ill-judged purchase by its nuclear unit Westinghouse. The decision to call in the lawyers was reported after the firm missed a second deadline to declare its earnings.
However, the state appears keen to keep Toshiba in Japanese hands and is now likely to give it a financial push in the right direction. The idea being that, Toshiba Memory Corp – a spinoff of Toshiba’s profitable chip business – could be backed by public funds in order to protect the country’s key technology and keep the company’s memory chip unit out of foreign hands. It now looks like the INCJ and DBJ will bid for the chip business, aiming to secure more than one-third of operational shares with further shares expected to be sold to US investors. The company is expected to begin selecting buyers on March 29th.
Earlier in the week, it had been reported that Toshiba was looking to offload its Westinghouse unit. Industry experts had pointed to the ill-fated purchase of a US nuclear power plant construction company by affiliate company Westinghouse in 2015 as the catalyst for the current financial turmoil at the company.
Toshiba is the world’s second-biggest producer of NAND flash memory chips, used in devices such as smartphones.