Toshiba’s Stock Plunges on USD8.8bn Chip Business Sale Report

Toshiba, the Japanese multinational conglomerate, is eyeing to generate at least JPY1 trillion (USD8.8 billion) from the sale of its stake in its memory chip business, sources revealed.

The report immediately caused Toshiba’s stock (TYO:6502) to plunge 1.02% in today’s trading at the Tokyo Stock Exchange. Toshiba’s share was trading at 184.50 a share at noon, down 1.90 from Monday’s trading.

The transaction, which Toshiba aims to complete by March 2018, will likely result in the company giving up majority stake over the memory chip business.

Sources said the company seeks to restart the sale process as soon as possible and may consider selling the business to multiple buyers rather than to just one bidder.

The company’s memory chip business makes chips for mobiles and tablets and is Toshiba’s most valuable business.

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A company spokesman has declined to comment on the report.

The reported sale of the memory chip business comes after the company’s nuclear unit lost about USD6 billion on failed schedules and massive cost overruns on a couple of southern US projects.

The Japanese conglomerate had earlier decided not to sell any stake in its chip business before the 31 March end of the current business year, in a move that makes it certain the company will have a negative net worth at the year’s end.

Toshiba is the world’s second biggest producer of NAND flash memory chips after South Korea’s Samsung Electronics. The chips are used in devices such as smartphones. – BusinessNewsAsia.com

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