Toshiba names buyer for troubled memory division
Toshiba Corporation has announced the preferred bidder to acquire its troubled memory division.
In a statement, the Japanese conglomerate revealed that its board of directors had selected the consortium of Innovation Network Corporation of Japan -- a public-private partnership between the Japanese government and 19 major corporations -- as well as Bain Capital Private Equity LP and the Development Bank of Japan as the preferred bidder to take on the sale of the Toshiba Memory Corporation.
In January, it was reported that Toshiba might be selling a majority stake in its flash memory operations to cover losses caused by the massive write-down of its nuclear business.
The decision was then made in April to split the memory division from Toshiba, with the company saying on Wednesday that this was done toward securing further management resources essential for the "continued growth of the memory business", as well as to support Toshiba in enhancing its financial structure.
The company said it chose the US-Japan consortium after it presented the best proposal based on its intention to retain employees, as well as to ensure "sensitive technology" remains maintained in Japan, in addition to the valuation the group gave Toshiba Memory.
The finalisation of the deal is now less than a week away, with the agreement to be set in stone by June 28, 2017, when Toshiba's shareholders meet at the company's annual general meeting.
It is expected the transaction will close in March next year upon clearance of the required processes, including competition laws in appropriate jurisdictions.
Toshiba projected a 712.5 billion yen write-down, postponed its earnings report, and announced that its chair Shigenori Shiga was stepping down in February, linking the three activities to the multibillion-dollar write-down of Toshiba's US nuclear subsidiary Westinghouse Electric.
The company said it delayed its earnings as it needed additional time for lawyers to examine Westinghouse's $229 million acquisition of CB&I's construction arm in 2015.
In addition to Shiga's resignation -- which came as he accepted full responsibility for the company's financial woes -- Toshiba president Satoshi Tsunakawa announced that he too would be taking a pay cut.
The company is expected to restructure its nuclear business, though nothing has been confirmed.
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.
Tsunakawa's predecessor Hisao Tanaka and the president before him, 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 thousands of employees go.