Toshiba Corp's board on Friday approved plans to make its core chip business a separate company and seek outside investment in it, aiming to avoid being crippled by an upcoming multi-billion dollar writedown for its US nuclear business.
Toshiba estimates the value of its chip business - the world's biggest NAND flash memory producer after Samsung Electronics - at JPY 1-1.5 trillion ($9-13 billion or roughly Rs. 59,326 crores - Rs. 88,992 crores), a person with direct knowledge of the matter has told Reuters.
The partial sale of its chip business would provide a lifeline for Toshiba as a massive charge could wipe out shareholders equity at the end of the financial year in March.
Toshiba has said it will unveil the size of the writedown on February 14 when it reports third-quarter results.
Potential investors in the chip business include private equity firms as well as business partner Western Digital Corp and the government-backed Development Bank of Japan (DBJ), sources have said.
Toshiba's memory chip business generated sales of JPY 845.6 billion ($7.4 billion or orughly Rs. 50,159 crores) and operating profit of JPY 110 billion for the year ended in March 2016.
© Thomson Reuters 2017
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