Toshiba’s strategy is pretty simple: retain control over the business despite selling portions of its majority stake to multiple bidders and raise $8.8 billion in the process.
In the wake of Toshiba seeking to write-off $6.3 billion on its nuclear unit, as per a person with direct knowledge of the matter at hand, Toshiba Corp is seeking to raise at least $8.8 billion (1 trillion yen) from the sale of its majority stake in its flash memory business. It wants to use this fund as a buffer against any fresh financial mishap.
According to the source, Toshiba is eager to start the sale process and is interested to sell to multiple buyers rather than one single bidder. Amongst the interested parties include, other chipmakers, investment funds and client companies, revealed the person who was not authorized to speak to the media and thus preferred the cover of anonymity.
The sale “is the best and the only way Toshiba can raise a large amount of funds and wipe out concerns about its credit risk,” said the source while adding that the sale should be completed by the end of March 2018.
Incidentally, Toshiba is focusing on the amount that it wants to raise and has yet to decide on the size of its stake that it wants to sell, revealed the source. The person went on to add that the company wants to retain at least one-third of its holdings, so that it can retain control over the business.
Toshiba’s spokeswoman responded to requests for comments saying the company cannot comment on the specifics of the sale process.
Toshiba had received offers ranging from 200 billion to 400 billion for 19.9% of its stake, said a source. The suitors at that time included Micron Technology Inc, Bain Capital, SK Hynix Inc and Western Digital Corp, said a source.
Following the $1.3 billion accounting scandal, the Tokyo Stock Exchange put Toshiba on a watchlist. For this reason, the company is unable to now tap the primary market for funds.