Toshiba clings on to memory chip business sale in the face of Chinese regulatory hurdles

The company has denied any plans to cancel the sale due to regulators dragging their feet.

Toshiba has every intention of completing the sale of its chip business despite challenges posed by Chinese regulators.

The statement has been made in response to recent media reports which suggested the tech giant may find alternative ways to raise funds or cancel the sale altogether if a decision has not been made soon by anti-monopoly regulators to approve the deal.

Reports suggested that Toshiba may renegotiate the sale, and it was also put forward that Toshiba Memory could be listed.

Toshiba has attempted to finalize a deal which will see an investment group led by Bain Capital take ownership of the coveted business for $18.6 billion.

However, the tech giant has missed a deadline of 31 March due to Chinese antitrust regulators, which are yet to permit the acquisition to take place.

In addition, the Mainichi newspaper reported on Sunday that Toshiba has managed to raise $5.4 billion from a share issue to foreign investors, and so the sale may not be necessary. No source for this information, however, was disclosed.

"Toshiba still intends to close the memory business transaction as soon as possible, and has not decided any concrete policy for the alternative, including termination of the transaction under certain circumstances," Toshiba said in a statement.

The Tokyo-based company added that while reports suggested the deadline for a final decision by China's Ministry of Commerce is 28 May, "this date was not announced by Toshiba."

Toshiba has been forced to make tough decisions regarding its future due to the disastrous Westinghouse venture.

The US nuclear division, acquired by Toshiba in 2006, has been a melting pot of disasters ranging from failed projects and delays to a $6.3 billion write-down for Toshiba. The unit was eventually forced to file for bankruptcy protection.

The delay in the sale, which was originally intended to recoup some of the funds lost by Westinghouse, may have been caused by current political tension between the United States and China.

The two countries are embroiled in a spat over trade deals and tariffs, which may not only be at the heart of the delay for the sale of Toshiba's business but may also be the reason Qualcomm's proposed $44 billion buyouts of NXP Conductors has stalled.

Chinese regulators are the only ones holding out on approving the deal, which has already been accepted by eight out of nine antitrust bodies.

SOURCE BY