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Hynix, Bain may join government-led bid for Toshiba’s chip unit

Kyodo

The government is considering bringing South Korean chip maker SK Hynix Inc. and U.S. investment fund Bain Capital into a consortium seeking to buy Toshiba Corp.’s chip unit, sources close to the matter said Wednesday.

The bid for Toshiba Memory Corp. being arranged by the Economy, Trade and Industry Ministry could be more than ¥2 trillion ($18.2 billion), the sources said.

It would also put pressure on Western Digital Corp., Toshiba’s chip manufacturing partner, which is seeking to buy the unit and opposes any sale to a third party.

The U.S. company is considering raising its bid price for Toshiba Memory to over ¥2 trillion, people close to the matter said last week.

Earlier in the month, Toshiba said it will seek to pick a bidder by June 28 when it holds a shareholders meeting to complete the process within fiscal 2017.

The cash-strapped company, reeling from its worst-ever financial crisis, is hoping for a quick sale of Toshiba Memory to offset huge losses related to Westinghouse Electric Co., Toshiba’s nuclear unit which filed for Chapter 11 bankruptcy protection in March.

Last month, Toshiba estimated a record group net loss of ¥950 billion for the fiscal year ended March 31 and said it is set to fall into a negative net worth of ¥540 billion at the end of next March.

Unless Toshiba eliminates negative net worth by March 2018, it will face delisting from the Tokyo Stock Exchange. Selling the flash memory business may well be the firm’s last resort.