Tags: toshiba | chip | business | sell | write-down

Toshiba Chip Business Sale to Offset Write-Down in Nuclear Division

Image: Toshiba Chip Business Sale to Offset Write-Down in Nuclear Division

A logo of Toshiba Corp. is seen on a printed circuit board in this photo illustration taken in Tokyo July 31, 2012. (Yuriko Nakao/Reuters)

By    |   Friday, 27 Jan 2017 12:35 PM

Toshiba Corp. said it will sell a minority stake in its memory chip business to offset an expected write-down of billions of dollars for overruns in its overseas nuclear division.

The Japanese conglomerate is looking to sell less than 20 percent of its memory chip business with hope of raising more than 200 billion yen ($1.7 billion) by the end of March, Reuters reported.

Toshiba developed its flash memory and its semiconductor memory in 1984, according to its website. NAND flash memories have become the international standard, with applications ranging from memory cards to solid-state drives (SSDs) and industrial equipment.

"The NAND business is the only one with value, as it makes up all of the semi-conductor profits, which comprise 75 percent of the overall company's profit," Mark Newman, an analyst at Sanford Bernstein in Hong Kong, told Reuters. "I won't be surprised if they sell another 20 percent in a few years time and then another 20 percent."

The company is dealing with large cost overruns at a U.S. power plant construction business recently acquired by its Westinghouse division. Chief executive Satoshi Tsunakawa said its nuclear division is no longer a central business focus, Reuters noted.

Sources told Bloomberg News that Toshiba may write down the value of its nuclear business by an estimated $3.5 billion, or 400 billion yen, to $6 billion, or 700 billion yen.

Bloomberg News reported that Goldman Sachs Group Inc. was working with Toshiba Corp. on making the minority share sale. The company will start seeking the first round of bids in early February, Bloomberg reported.

Those sources told Bloomberg that potential bidders could come from strategic investors and foreign private equity funds. Toshiba is expected to decide on a buyer by March 31.

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Toshiba Corp. said it will sell a minority stake in its memory chip business to offset an expected write-down of billions of dollars for overruns in its overseas nuclear division.
toshiba, chip, business, sell, write-down
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2017-35-27
Friday, 27 Jan 2017 12:35 PM
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