At a board meeting Wednesday struggling Toshiba Corp. decided to aim toward selling its flash memory business to a consortium led by Bain Capital, signing a memorandum of understanding to accelerate negotiations to seal the deal by the end of September.

The Tokyo-based electronics conglomerate apparently flip-flopped on its plan to negotiate an agreement with a group that includes Toshiba’s chip unit joint venture partner Western Digital Corp.

But the ongoing tumult that has bedeviled the process is unlikely to end anytime soon, as Toshiba will have to deal with Western Digital, which has been taking aggressive legal moves to block the sale to other parties. Toshiba Memory Corp. has an estimated worth of ¥2 trillion.

A Toshiba spokesman said it signed a memorandum of understanding on Wednesday with Bain Capital Private Equity LP, a U.S. investment fund whose consortium includes Innovation Network Corp. of Japan and the Development Bank of Japan — both of which are state-backed bodies — and SK Hynix Inc., a South Korean flash memory manufacturer.

Toshiba said the Bain group made a new proposal worth pursuing. The consortium raised its offer to ¥2.4 trillion — up from its initial ¥2 trillion bid, and more than what the Western Digital team is offering.

A memorandum of understanding is not a legally binding agreement. Toshiba said it will continue to talk with Western Digital, which has taken the matter to U.S. and international courts, and another group led by Taiwan’s assembler giant Hon Hai Precision Co.

Even if Toshiba formally seals the deal with the three-country investment body, the sales process could be mired in a potential legal battle with Western Digital, which is teaming up with U.S. investment fund Kohlberg Kravis Roberts & Co.

Innovation Network Corp. of Japan and the Development Bank of Japan are also involved in the Western Digital-led bid.

“We are disappointed that Toshiba would take this action despite Western Digital’s tireless efforts to reach a resolution that is in the best interests of all stakeholders,” Western Digital said in a statement, adding that its arbitration cases filed in international court are still in process.

It was June when Toshiba first selected the consortium led by Bain as a preferred bidder, saying it would make a formal decision by an annual shareholder meeting scheduled later that month.

Yet it failed to do so, and media had reported that Toshiba was leaning to sign a deal with Western Digital.

At one point, Toshiba had even reached a broad accord with Western Digital. But negotiations once again reached an impasse after the U.S. joint venture partner demanded more than one-third of voting rights in the unit to ensure its power of veto on important management issues.

Toshiba desperately needs cash to offset a massive negative net worth of ¥504 billion from liabilities at its bankrupt nuclear unit, Westinghouse Electric Co. The Japanese tech giant needs to accomplish this by March to avoid delisting from the Tokyo Stock Exchange.

The firm’s reconstruction strategy is based wholly on the premise that it remains listed on the exchange.

Toshiba is running out of time as it usually takes six months or longer to receive clearance for such a deal from antitrust regulators in major countries.

Information from Kyodo added

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