TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Toshiba to sell memory unit in June

Toshiba Corp. will sell its memory chip subsidiary Toshiba Memory Corp. on June 1,to be able to make significant improvements to its financial base.

News Desk (The Japan News/ANN)
Tokyo, Japan
Sat, May 19, 2018

Share This Article

Change Size

Toshiba to sell memory unit in June Toshiba Corp. has planned to sell its memory chip subsidiary Toshiba Memory Corp. on June 1. (Bloomberg/Tomohiro Ohsumi)

T

oshiba Corp. announced on Thursday that it will complete the sale of its memory chip subsidiary Toshiba Memory Corp. on June 1, after receiving all required approvals Tuesday from Chinese antitrust authorities to sell the business to a Japan-US-South Korean consortium.

By clearing the biggest hurdle for the sale of the unit to the consortium, led by US investment fund Bain Capital Private Equity, Toshiba will be able to make significant improvements to its financial base.

If the sale is completed, Toshiba’s shareholders’ equity is expected to exceed ¥1 trillion (US$9 billion), which will restore Toshiba to the sound financial condition it was in before its accounting irregularities were discovered in 2015. The company aims to strengthen its financial base with funds obtained through the sale and invest in, among other fields, infrastructure projects that will become a main pillar of the company’s future business.

The memory chip business is said to require an annual investment of hundreds of billions of yen to maintain competitiveness in the market, the conditions of which also keep changing drastically. The sale of Toshiba Memory will set Toshiba free from such burdens and risks. At the same time, however, the company will lose a cash cow that earns about 90 percent of its operating profits. This means Toshiba will face the task of boosting its earning capacity.

Toshiba was found to have suffered huge losses in its overseas nuclear power business at the end of 2016, causing excessive liabilities. That prompted it to sign a deal to sell Toshiba Memory to the Bain-led group for ¥2 trillion in September last year.

Toshiba initially aimed to complete a sales procedure by the end of March, but it has been delayed because of prolonged screening by Chinese authorities.


This article appeared on The Japan News newspaper website, which is a member of Asia News Network and a media partner of The Jakarta Post
 

{

Your Opinion Matters

Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.

Enter at least 30 characters
0 / 30

Thank You

Thank you for sharing your thoughts. We appreciate your feedback.