Electronics giant plans to sell off chips business to go private as part of post-Lehman restructuring
Toshiba has announced plans to split off its powerful chip business into three separate companies and a sale to a Japanese company to go private in a fresh effort to turn around its finances.
Toshiba on Thursday said it will split off its memory chip unit from its electronics division and seek a buyer. A group of Japanese companies led by a state-backed fund, the Innovation Network Corp of Japan, will offer a final offer to buy the roughly $18bn of the chips business as it mulls options for the majority stake.
Toshiba called a special shareholder meeting on 2 April to vote on the break-up, which will create a chip unit, plus a storage-related company and a digital services company.
The new structure will help cover the cost of building a huge memory plant in western Japan, Toshiba said. It faces a looming liquidity crisis after being forced to write down $5.3bn on its US nuclear operations, Westinghouse, and tap money from lenders to cover losses.
“We had hoped to finish the step of splitting off the chips business by the end of 2018 but it was unlikely,” the chairman, Norio Sasaki, said in a statement. “This step is an important milestone towards stabilising our finances.”
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New shareholders could be involved in the sale of the chip business, in part to appease auditors, who are wary of a stock ownership as part of an audit committee, the Nikkei business daily reported on Thursday.
The break-up comes in the midst of government-led efforts to shed state-owned assets by private firms. The measures were a priority of the ruling Liberal Democratic party at last year’s general election.
Toshiba last year revealed financial misconduct that could result in a hefty fine by Japanese authorities and could threaten the future of the scandal-hit firm.