Toshiba Picks $20BN Chip Bidder
In its efforts to recover from its massive losses, Toshiba Corp. has been selling a couple of its operations in the past couple of quarters in order for the company to remain in business.
The Japanese company suffered a couple of major setbacks due to the company’s nuclear operations in their U.S. Westinghouse due to the Fukushima nuclear disaster in 2011. Westinghouse Electric Co. filed for bankruptcy protection earlier this year due to the losses they are currently incurring from building the reactors caused by the events.
Toshiba delivered losses of $8.6 billion for the fiscal year that ended last March during its earnings report. The company was not able to receive auditor endorsements during the earnings call due to the company’s current finances from their ventures in the United States. Toshiba also admitted back in 2015 that it has been falsifying its records since 2008 as its leaders struggled to keep their operations afloat and their massive expenses hidden from its board.
The company announced on Wednesday that its board of directors has finally selected a bidder for the sale of their memory chip business which has failed to provide a steady source of revenue for the company. Toshiba has was not able to gain profits from its operations of the chip business.
The chosen bidder for the sale of the Toshiba Memory Corp was the Innovation Network Corp of Japan, Bain Capital Private Equity and the Development Bank of Japan. The company aims to reach an agreement along with legal procedures prior to its upcoming general shareholder’s meeting next week.
The deal would allow the Japanese-tech giant to rise up from one of its biggest losses which has greatly affected the company’s ability to function through an access with the state-backed investment fund Innovation Network Corporation as long as Bain Capital which is an American buyout firm.
According to a statement from Toshiba, the group gave the company the best price terms, the promise to keep its employees and the ability to keep development of sensitive technology within the country which was one of the most important points.
On the other hand, Toshiba is facing a small setback with the proceedings of the bid after American data storage company Western Digital claimed that it owns a percentage of Toshiba’s semiconductor factory in Japan and claims that it must have a say in the bid or any ongoing Toshiba deal. Western Digital has pleaded the California state court to interfere with any ongoing sale or big. It has also pursued an arbitration in the International Court of Arbitration in Paris. In a release, the company stated that it remains confident of its consent rights along with its legal position in Toshiba. Toshiba has denied the claims from the company.
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