Toshiba (TOSBF) hit out at Western Digital (WDC) - Get Report over its perceived interference in the sale of its stake in the pair's memory chip joint venture Friday and said that it aims to close a deal to sell the asset by mid-June.
The struggling Japanese firm will transfer its stake in the joint venture back to Toshiba Corp., from a newly created holding company, after WDC challenged its decision to transfer ownership and invoked its right to arbitration at the International Court of Arbitration.
WDC has previously described Toshiba's move, which was announced Wednesday, as "a clear acknowledgement of Western Digital's consent rights."
"This move, which will be effected on June 3, has been initiated solely with the aim of securing and advancing the process for closing bids for third-party participation in Toshiba Memory Corporation in a timely manner," Toshiba said in its Friday statement.
The Japanese company also said it aims to narrow the pool of bidders to just one candidate by mid-June and to seek to close a definitive agreement by the date of its June 28 annual shareholder meeting.
"Western Digital Corporation (WD), which became the parent company of SanDisk in 2016, has objected to and subsequently interfered with the progress of the bid process. WD has also not participated in the bid processes which have been conducted from January this year," Toshiba said.
The under fire electronics maker has been attempting to organize a sale of the memory chip division to repair a black hole in its balance sheet, created by impairments and other charges related to the bankruptcy of its U.S. nuclear business, Westinghouse.
It said in May that its unofficial net loss was ¥950 billion ($7.6 billion), the largest ever reported by a Japanese industrial firm, which will push it more than ¥500 billion deep into negative equity.
"Toshiba has devoted months to seeking the best solution it can with WD. Nevertheless, in addition to invoking arbitration at the International Court of Arbitration through SanDisk, WD has started to contact other third party bidders and Toshiba's supporting banks with warnings of legal action," Toshiba said Friday.
The Japanese firm rounded off its statement by saying that its management are "no longer able or willing to ignore the unwarranted interference" and that its return of the joint venture stake to the group company's ownership removes all grounds for any complaint.
Toshiba shares closed 4% up in Tokyo Friday at ¥257.70. Western Digital closed at $91.59 on Thursday.
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