Toshiba’s new CEO says $18 billion chip sale won’t be cancelled

Toshiba’s recently inserted CEO Nobuaki Kurumatani has stated that the company’s $18 billion sale of its chip unit will not be cancelled unless there is ‘any major material change’ in circumstances.

As Toshiba was unable to complete the sale to a consortium led by U.S. private equity firm Bain Capital by the agreed deadline of March 31, the company now has the option to cancel the sale without any repercussions. The sale did not meet the deadline as it was still waiting for approval from China’s anti-monopoly regulator. However, Kurumatani said that he is still committed to getting the deal over the line as soon as possible. “We will maintain our stance and wait (for Chinese regulatory approval) unless drastic changes occur,” Nobuaki Kurumatani told reporters.

Kurumatani became the first outsider to lead Toshiba in half a century. An ex-banker, Kurumatani was brought in to tackle those opposed to the $18 billion chip unit. 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’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.

Toshiba bosses also 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.

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