Toshiba Corp. said Monday it will be unable to sell its prized memory chip unit by the end of March as planned, as it has not yet received approval from Chinese antitrust regulators.
The electronic giant said in a statement that it still intends to complete the transaction "as soon as possible," although the contract stipulates that the sale of Toshiba Memory Corp. could be called off if not finalized by the end-of-March deadline. The company had set a March 23 deadline so that it could complete the deal by the end of the month.
The prolonged regulatory process is not expected to have a serious impact on the company's financial condition, as it's finances have been improved through a ¥600 billion new share issue.
The Japanese conglomerate agreed in September to sell Toshiba Memory, the world's second-largest producer of NAND flash memory chips used to store data on smartphones and PCs, to a consortium led by U.S. private equity firm Bain Capital for ¥2 trillion ($19 billion).
Following massive losses in its U.S. nuclear business, Toshiba intended for the sale to raise cash in order to lift itself out of negative net worth and avoid being delisted from the Tokyo Stock Exchange. The new share issues helped address those concerns.
The memory chip unit became the object of a bidding war between the Bain camp, Toshiba's business partner Western Digital Corp., and Taiwan's Hon Hai Precision Industry Co., which is also known by its trade name, Foxconn.