Business / Corporate

State-backed INCJ, DBJ to start investment talks on Toshiba Memory

JIJI

Two government-backed bodies plan to start talks this month to invest in Toshiba Memory Corp., which Toshiba Corp. has sold to a consortium led by U.S. investment fund Bain Capital, informed sources said.

Innovation Network Corp. of Japan and the Development Bank of Japan will hold negotiations with Bain Capital, now the largest shareholder in the flash memory company, and others, the sources said Friday.

The move is in line with the government’s position that Toshiba’s flash memory technology should be kept at home.

INCJ and the DBJ had initially considered investing ¥300 billion each in Toshiba Memory, but they balked when the contract was concluded in September 2017, due to uncertainty over a court dispute over the unit’s sale that was simmering between Toshiba and its U.S. business partner Western Digital Corp.

Any investment by the two entities will now likely fall short of ¥300 billion, the sources said.

All shares in the chipmaker have been transferred from Toshiba to a special-purpose company in which Bain Capital has a stake of 49.9 percent in terms of voting rights, followed by Toshiba at 40.2 percent and precision equipment maker Hoya Corp. at 9.9 percent.

The state-affiliated investment fund and lender will discuss matters related to their capital participation with the parties concerned, including the idea of acquiring shares from the owners of the special-purpose company other than Toshiba, the sources said.

Toshiba CEO Nobuaki Kurumatani told a news conference in mid-May that his company would decide whether to reduce its voting rights in Toshiba Memory after monitoring market prices for semiconductor chips.