Daily Management Review

Toshiba To Miss Deadline For Its Chip-Unit Sale


03/30/2018


Investors do not worry with the deadline miss of Toshiba, as they suggest other alternatives which they consider to be more valuable.



Toshiba Corp reported that the company will not be making it by the deadline of March end to meet the “$18 billion deal” on selling its “prized chip”. The reason behind of this miss is that the company is still to receive Chinese “anti-monopoly approval”.
 
Looking at the failure, some investors have urged the company to consider walking out of the sale option for the second global “NAND chips” producer “without penalty”. However, one statement from the company showed its plans of still selling the unit as it aims of finalising the deal “as soon as possible”.
 
According to Reuters:
“Toshiba agreed last year to sell the chip unit to a consortium led by U.S. private equity firm Bain Capital to cover liabilities arising from its bankrupt U.S. nuclear unit Westinghouse”.
 
Nevertheless, Toshiba recovered “$5.4 billion” by issuing a share to “foreign investors” towards the later part of last year, thus it no longer is in a fund crunch. Among the shareholders some activists are not for the said sale as they claim the transaction value at “$18 billion” underrates the business. Therefore, Toshiba needs to either “renegotiate” the same with Bain Group or look towards an IPO.
 
Most profits of the company are being accounted by the chip business unit, while Toshiba continues to struggle in establishing “other core businesses” like “social infrastructure”. While Reuters informed that:
“Under the deal, it plans to repurchase 40 percent of the chip unit”.
 
References:
reuters.com







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