TOKYO (dpa-AFX) - Toshiba Corp. (TOSYY.PK, TOSBF.PK) has begun negotiations with business partner Western Digital in hopes of reaching an agreement this month to sell its flash memory arm and salvage a vital part of its turnaround plans, the Nikkei reported.
The report indicated that a consortium including Western Digital, Kohlberg Kravis Roberts of the U.S., the public-private Innovation Network Corp. of Japan and the state-backed Development Bank of Japan has tendered a roughly 1.9 trillion yen or $17.3 billion bid for Toshiba Memory. The American hard-drive manufacturer would contribute hundreds of billions of yen in funding without initially receiving voting rights. Its plan is to take a stake of less than 20% after the deal clears antitrust reviews.
The Western Digital camp is expected to complete due diligence on the memory unit as early as next week. Toshiba aims to sign a final deal after getting the board's blessing at a meeting this month.
But talks could hit an impasse if the two sides cannot agree on terms. If negotiations fall through, Toshiba will consider other options to get back on its feet, such as a capital increase, the report said.
Once a buyer is chosen, antitrust reviews are expected to take six to nine months. Toshiba hopes to complete the sale within the fiscal year ending March 2018 in order to return its shareholders' equity to positive territory after crippling losses on U.S. nuclear operations -- a must for staying on the Tokyo Stock Exchange.
Copyright RTT News/dpa-AFX