In the afternoon of March 23rd, Beijing time, Toshiba must obtain approval from China's regulatory authorities on Friday before it can sell its memory chip business for $18 billion by the end of March. The outside world is therefore worried that the company may not be approved on time and is forced to seek other options such as IPO.
The company agreed last year to sell its world’s second-largest maker of NAND flash memory chips to a consortium led by Bain Capital of the United States to fill the financial losses of its US nuclear business bankruptcy.
The company hopes to complete the sale within the fiscal year that ended on March 31. Toshiba said in September last year that it needed to obtain antitrust approval before the end of March 23 to complete the plan on time.
Even if it is impossible to complete the sale by the end of March, Toshiba will not immediately face liquidation or delisting because the company has raised funds through the stock issue at the end of last year. But the deal is still important to help the company recover from the $1.3 billion financial scandal and the nuclear power business crisis.
Informed sources said that because the Chinese government has not officially approved the transaction, the probability of completion by the end of March is very low.
Another person familiar with the matter said that even if it cannot obtain antitrust approval on Friday, it must be approved at the latest in the beginning of next week. Otherwise, it will not be completed on time.
If the sale cannot be completed before the end of March, Toshiba can choose to give up without having to pay a fine.
Informed sources also revealed that Toshiba will listen to suggestions from activist shareholders who believe that the $18 billion price underestimates the value of the deal. Argyle Street Management in Hong Kong once stated that the Toshiba board should consider the IPO.
A Toshiba spokesperson said the company will still work hard to complete the transaction by the end of March. Bain Capital declined to comment.
The Chinese Ministry of Commerce has not yet responded. The
