• Kyodo


Toshiba is considering extending the deadline for the second round of bidding for its chip business, as its partner Western Digital continues to object to the sale, sources said Thursday.

Toshiba initially planned to close the bidding on May 19 but is now considering extending the schedule to the end of the month or later, the sources said.

The potential delay in the process of the sale of the chip operation could derail its turnaround efforts, as the sale is crucial to raise cash to make up for huge losses from its U.S. nuclear business.

Western Digital, a joint operator of Toshiba’s Yokkaichi flash memory plant in Japan, has claimed it has the right to block the sale of the spun-off unit Toshiba Memory and has demanded it be allowed to take the initiative in operating the chip unit.

Toshiba officials and Western Digital Chief Executive Officer Steve Milligan held talks recently on the sale but failed to reach an agreement.

The embattled Japanese conglomerate is reeling from massive losses related to Westinghouse Electric, which filed for Chapter 11 bankruptcy protection in March.

Toshiba said after the filing it could post a group net loss of ¥1.01 trillion ($8.9 billion) for the fiscal year that ended March 31, the largest ever for a Japanese manufacturer, and fall into a negative net worth of 620 billion.

Toshiba is looking to raise at least ¥2 trillion by selling a majority stake in Toshiba Memory, the world’s second-largest producer of NAND flash memory chips after South Korea’s Samsung Electronics. The chips are used in devices such as smartphones.

Potential buyers include Taiwan’s Hon Hai Precision Industry, which bought Japanese display maker Sharp.

A consortium including U.S. investment funds, state-backed turnaround fund Innovation Network Corp. of Japan and the state-owned Development Bank of Japan is preparing to join the bidding.

Sources said Toshiba is extending the deadline, as it could also be waiting for the Japan-U.S. consortium to raise enough cash for the acquisition.

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