Toshiba to complete $18 billion chip unit sale by June at latest

Toshiba is expecting to have completed it $18 billion chip unit sale by June at the very latest. 

Yasuo Naruke, the head of Toshiba’s chip unit, said that the company is doing everything to get the deal over the line by an agreed deadline of the end of March. However, Toshiba is still awaiting the antitrust regulatory green light from China and so the deal could be delayed.

“We’ve been making various efforts to close the deal in March,” Naruke said. “Even if the deal did not close by then, it would close at some point in April, May or June.”

It is widely viewed as unlikely to gain the necessary regulatory clearance by the end of the financial year in March, however, as Chinese reviews usually take at least six months. Toshiba is in less of a rush to finalise the deal since it received injections of capital late last year from overseas investors. If it does not complete the deal by March, it has the option of walking away, sources have said.

Last month, Toshiba recruited ex-banker Nobuaki Kurumatani to appease those against the sale of its chip unit. Kurumatani will assume the role of CEO to tackle those opposed to the $18 billion chip unit sale to a consortium led by Bain Capital. Hong Kong-based activist investor, Argyle Street Management, a hedge fund with $1.2 billion under management, has openly opposed the sale. Argyle Street Management argues that the sale is no longer necessary as it has other investors interested.

Toshiba finally penned an $18 billion deal for its chip unit in September, paving the way for a consortium led by Bain Capital and Apple to take over its memory unit. That sale was then met with opposition from Toshiba partner Western Digital, however an out of court settlement was reached between the two firms paving the way for the sale to go ahead.

Toshiba’s financial woes are largely connected to its failed nuclear unit Westinghouse. Acquired in 2006, an ill-advised purchase in 2015 led to massive scandal and loses for its parent company. Last year Westinghouse filed for a Chapter 11 bankruptcy and Toshiba was left scrambling to recoup funds.

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