Toshiba (TOSYY) said Friday it will spin off a part of its chip business in a bid to strengthen its finances eroded by the greater-than-expected loss resulting from the acquisition of its U.S. nuclear unit.
The board of the troubled Tokyo-based electronics-to-nuclear group approved selling the memory business within its storage & electronics devices solutions segment, including the SSD business, but will retain its image sensor business. Given that the memory business is one of the company's focus areas, the board's decision will be put to a shareholder vote in an extraordinary general meeting in late March, the company added.
In addition to saying that the spin-off is aimed at enabling faster decision-making and enhancing financing for the memory business, Toshiba also admitted it needed to improve its financial position. It is seeking third-party capital for the memory business, it added, without providing any further detail.
Japanese media have named Canon (CAJ) - Get Report , Tokyo Electron (TOELY) , WesternDigital (WDC) - Get Report , PermiraAdvisers and Bain Capital as parties interested in investing in the memory business.
Toshiba is set to finalize and disclose the amount of the goodwill and losses resulting from the acquisition of CB&I Stone Webster on February 14.
Toshiba shared closed Friday up 0.5% at ¥259.9 each but has tanked about 41% since it emerged that it would book greater-than-expected losses for the U.S. nuclear unit.