Toshiba said Wednesday it has not yet reached a deal to sell its prized chip business to a consortium of US, Japanese and South Korean investors, as the troubled conglomerate holds a shareholder meeting.
The sale, reportedly worth some JPY 2.0 trillion ($18 billion), is seen as crucial for the cash-strapped company to plug massive losses at its US nuclear division, Westinghouse Electric.
Last week, Toshiba said it has entered into exclusive talks with a group comprising the public-private Innovation Network Corp. of Japan, state-backed Development Bank of Japan, and US private equity fund Bain Capital, with South Korean chipmaker SK hynix acting as lender.
The company was aiming to announce the sale before Wednesday’s investor meeting, but said negotiations were still continuing.
“It is taking time to reach a consensus because the consortium comprises multiple parties, and closure was not achieved by Toshiba’s primary target date,” it said in a statement.
“Toshiba intends to continue the negotiation toward reaching a definitive agreement at the earliest possible date, and will announce this in a timely manner once the agreement is closed.”
Toshiba’s huge losses at Westinghouse have raised doubts about the future of one of Japan’s best-known companies.
Toshiba – still recovering from a 2015 accounting scandal – is probing claims of financial misconduct by senior managers at the US unit and to gauge the impact on its finances.
The chip unit sale is seen as key to Toshiba’s turnaround, but it could still face a roadblock as US-based partner Western Digital, which jointly runs a key chip plant in Japan, opposes the sale.
Toshiba is the world’s number two supplier of memory chips, behind South Korea’s Samsung and ahead of third-placed Western Digital.
The sale involving state-backed buyers means the Japanese government will effectively own the chip division.
Tokyo had concerns about losing a sensitive technology amid questions about security around systems already using Toshiba’s memory chips, which are also widely used in data centres.
The profitable division has accounted for about one-quarter of Toshiba’s total annual revenue.
Toshiba was down 0.51 percent at 291.5 yen in morning trading.