Troubled Toshiba Said to be Close to Selling Memory-Chip Business (Updated)

Reuters reports that financially troubled Toshiba Corporation of Tokyo, Japan, is close to selling its $17.4 billion memory-chip business, Toshiba Memory Corporation, to a consortium led by its partner in the memory-chip business, U.S.-based Western Digital.

According to Reuters, the consortium and Toshiba will announce the deal on Thursday when the Toshiba board will meet. Toshiba’s sale of Western Digital will help mend its flagging finances, as it’s trying to cover billions in losses incurred by its bankrupt U.S. nuclear business, Westinghouse.

Western Digital is said to be contributing some 150 billion yen ($1.4 billion), for a stake of about a third of the memory-chip business.  Other members of the group, which is offering 1.9 trillion yen ($17.4 billion) for Toshiba Memory Corporation,  include the Innovation Network Corp of Japan and the Development Bank of Japan as well as KKR, with each putting up 300 billion yen.

Toshiba is said to wish to close the sale by the end of its financial year that ends in March 2018 in order to ensure it’s  not in negative net worth, which could result in a delisting from the Tokyo Stock Exchange.

Update: Toshiba today issued a statement indicating that it’s continuing negotiations for the sale of Toshiba Memory Corporation with three possible consortium buyers: 1) the Innovation Network of Japan, Bain Capital, and Development Bank of Japan consortium; 2) a consortium that includes Western Digital; and 3) a consortium that includes Hon Hai (otherwise known as Foxconn Technology). It says it will announce it’s decision once it has reached it.

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