South Korean chipmaker SK Hynix Inc. is asking for up to 33.4 percent of voting rights in Toshiba Corp.’s semiconductor unit as they continue talks on the sale of the business, according to sources.
SK Hynix has joined a consortium chosen by Toshiba as a preferred bidder for Toshiba Memory Corp. SK Hynix would provide loans to a U.S. fund participating in the joint bid, as Toshiba is concerned it may take longer to clear antitrust reviews if a chipmaker takes a stake in the unit.
Western Digital Corp., Toshiba’s joint chip production partner, is opposed to any sale to a third party without its consent.
Cash-strapped Toshiba is rushing to raise funds by selling the chip unit so it can eliminate negative net worth by next March to avoid being delisted by the Tokyo Stock Exchange.
Under the most recent plan, a Japanese government-backed fund — the Innovation Network Corp. of Japan — and the government-owned Development Bank of Japan aimed to take a combined 66.6 percent stake in Toshiba Memory with the rest to be owned by U.S. fund Bain Capital.
The Japan-U.S.-South Korean consortium was organized by the Japanese government, as it is concerned about Toshiba’s key technology getting into the hands of a foreign company.
Toshiba President Satoshi Tsunakawa said at a news conference last month that the South Korean company will “have no voting rights and therefore technology drain will be prevented.”
But SK Hynix has demanded the right to acquire a portion or even the entire stake to be held by Bain Capital in the future, according to the sources.
Toshiyuki Shiga, chairman of Innovation Network Corp. of Japan, told reporters last Friday that no problems have stalled negotiations but he could not say when the deal could be sealed.
Western Digital, which has jointly invested in Toshiba’s Yokkaichi flash memory plant in Mie Prefecture, has asked a U.S. court to block the deal. The U.S. company is also seeking arbitration with an international court, claiming the sale of the chip unit without its consent breaches their contract.
Ahead of a U.S. court hearing scheduled for July 14, Toshiba said Monday it has submitted a counterargument against the U.S. partner’s claims to the U.S. court.
The Japanese company is looking to raise at least ¥2 trillion from the sale of the chip unit, as it estimates a negative net worth of ¥581.6 billion as of the end of March.
Toshiba also said Monday it will bring Swiss-based Landis+Gyr AG smart meter subsidiary public to sell its holding shares in the subsidiary as part of efforts to bolster its financial conditions.
The Japanese conglomerate said Landis+Gyr is aiming to list on the SIX Swiss Exchange by the end of September. But Toshiba said it is also considering selling Landis+Gyr and could scrap the plan to list the subsidiary if it finds a buyer.
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