SanDisk, which is reeling amid a horrid flash memory market, has bought itself some financial wiggle room by tweaking the terms of its joint venture with Toshiba.
The news comes as both Toshiba and NEC are cutting workers and capital spending as the memory market remains rattled by too much supply and weak demand. Toshiba posted its first loss in seven years.
Under the new terms of the SanDisk-Toshiba manufacturing joint venture, 20 percent of the capacity will be transferred to Toshiba. That move (statement) gets SanDisk out of lease obligations that would ding cash flow.
The total value of the deal is $890 million and SanDisk gets a third of that sum in cash. The rest of the deal just reduces SanDisk's leases by 28 percent.
Other joint ventures on memory manufacturing between Toshiba and SanDisk stay the same. While the news is good for SanDisk these ventures don't get rejiggered from a position of strength.