Toshiba to sell memory business to Bain-led group for 2 trillion yen
Japanese conglomerate Toshiba Corp has announced it is selling its memory-chip business to a Japanese government-backed consortium led by Bain Capital for 2 trillion yen.
The 142-year-old company had selected the Bain-led consortium as its preferred bidder back in June, which also includes the Innovation Network Corporation of Japan and the Development Bank of Japan.
The Kyodo News agency, citing unnamed sources, reported that the Bain-led group also includes South Korean chipmaker SK Hynix, Apple, Dell, Kingston Technology, and Seagate Technology.
Toshiba said in a statement that it expects to close the deal "within days" and that it had also agreed to invest 350.5 billion yen into its memory-chip unit, maintaining some ownership.
The sale of Toshiba Memory -- which the company expects to complete by the end of March 2018 -- will allow the company to make up for the losses it had suffered from its nuclear power business Westinghouse Electric.
Toshiba had suffered a $6.3 billion write-down due to rising costs at two Westinghouse nuclear projects in the US, wiping out shareholder equity and dragging the company to a full-year loss for the second year in a row.
In February, Toshiba chairman Shigenori Shiga accepted responsibility for the company's financial woes and resigned.
The company filed for bankruptcy protection in the US in March to avoid posting negative net worth for a second year that would force it to be delisted from the Tokyo Stock Exchange.
The multiple postponements of Toshiba's full-year earnings report prompted an automatic demotion to the second rung of the Tokyo Stock Exchange.
Toshiba also said in April that it was considering selling a portion or all of its Moorside development company NuGeneration, after France's Engie, formerly known as GDF Suez, backed out of the nuclear project, selling its stake back to Toshiba for approximately £111 million.
It was also reported that Toshiba president Satoshi Tsunakawa would be taking a pay cut to help keep the company afloat.
In 2015, Toshiba delayed planned earnings releases twice as it reeled from a 150 billion yen accounting scandal where the company overstated its profits over the course of seven years.
Former Toshiba president Hisao Tanaka and his predecessor Norio Sasaki quit in the wake of the scandal, which was blamed on management's overzealous pursuit of profit.
More than a year ago, as part of another major restructuring effort, Toshiba sold off its PC business and let go thousands of employees.
For the previous financial year ending March 31, 2017, Toshiba posted a net loss of 965.7 billion yen, and also reported negative net worth of 552.9 billion yen.
With AAP