Toshiba is looking for a solution to its memory chip spinoff, Toshiba Memory, as part of a plan to recover from billions of dollars in costs after their U.S. nuclear power unit Westinghouse went bankrupt. Toshiba is now considering an IPO for its memory chip and its announced sale to a consortium led by Bain Capital, if it doesn’t receive regulatory approval by the end of March.
Toshiba’s shareholders are divided over the new possibility, as they were when the $18 billion deal with Bain Capital was announced. First, they were reluctant to take on the deal because some of them think that the sale devalued the memory chip business. Now, some think the IPO is unnecessary, thanks to the $5.6 billion equity issuance and the upgrade of Toshiba’s status by the Tokyo Stock Exchange, according to news first reported by The Financial Times.
Among those voices against the IPO is the Hong Kong based investor Argyle Street Management, a hedge fund with $1.2 billion under management.
For the time, a Toshiba official spokesperson stated that the company is fully committed to completing the sale to the Bain Capital led consortium, but the good financial report presented by Toshiba in the last period is not the only condition putting pressure on the process.
For many analysts, the Toshiba-Bain Capital deal is highly probable, but will most likely not happen by the March 31 deadline, posing a threat to Toshiba’s plan to rise above the danger of being unlisted by the Tokyo Stock Exchange if it doesn’t exit the negative shareholder equity in which it fell after the bankruptcy of its U.S. nuclear business.
Toshiba Memory is the world’s second-biggest producer of NAND chips, and for now stays as one of the most followed deals of the year.