toshiba puts prized chips unit up for sale to salvage business
May soon become the shadow of their own before.
Tokyo was found in the company\'s display materials on Tuesday-
The US-based conglomerate is considering selling a large stake in its storage-chip business, which runs counter to a plan to limit sales to 20%.
Later, the president of Satoshi Tsunakawa went further and said it was possible to sell the entire unit now.
NAND flash memory used in smartphones and SSDs is one of the few highlights of Toshiba.
Bloomberg Intelligence estimates that the value of the entire department could be as high as $14 billion, more than $6.
Of the struggling nuclear units, 3 billion were written down.
This will leave Toshiba with minimal growth prospects for its reliance on public infrastructure projects, elevators and troubled consumer electronics businesses.
In response, investors dropped their shares to 10-month lows;
An analyst even suspended the rating.
\"We have reached the stage of assets --
Divestiture, \"said Amir Anwar Zad, head of stock sales at BGC Partners Inc. Japan. in Singapore.
\"They are selling most of the chip business, which is the only business they can sell at the moment.
SK Hynix, South Korea, is one of the potential buyers of the chip division.
The company, which is seeking to expand its share of the global mobile and smart device market, has offered to buy a stake in the memory sector.
Chinese chip makers are also among other potential buyers.
Toshiba also said it could pull out of nuclear power plant construction and offer only equipment and engineering, which would make it extremely difficult to sell nuclear projects to customers.
All options for the nuclear business are on the table, including the possible sale of Westinghouse Electric, its U. S.
Nuclear units, he said.
Nevertheless, Toshiba now expects a temporary loss of 500 billion yen in the nine months ended December. 31.
The company said, therefore, as of this year, the equity of shareholders will be reduced to a negative of 150 billion yen.
Masaya Yamasaki, analyst at Nomura Securities Co. , said all of this made it difficult to assess Toshiba\'s future profitability potential.
He suspended his rating of the company. Almost three-
25 of Toshiba\'s 15 analysts tracked sold or held ratings on the stock for 25 quarters, although many of them have been adjusting their targets since Tuesday.
\"Based on our policy of not predicting the company\'s actions, we have no choice but to predict that the company will continue to have negative net assets,\" Yamaki wrote in a note . \".
Toshiba\'s share price in Tokyo fell 13% to its highest level since April.
Toshiba fell more than 25% this year after disclosing new accounting challenges at the end of December.
At present, Toshiba seems to have the support of Sumitomo Mitsui Bank, the main bank.
Mizuho Financial Group Co. , Ltd.
Sumitomo Mitsui Trust Bank Co. , Ltd.
He met with the company\'s manager and expressed support, Kyodo News reported.
Chip sales could be resisted by the government.
Japan\'s chief cabinet secretary, Yoshihide Suga, said flash memory chips were an \"extremely important\" technology for Japan\'s growth strategy.
\"There are too many questions around Toshiba, where do you start,\" said Shiye Zhengyan, an analyst at Tokyo securities in Tokai.
\"Investors want to know what will happen to the nuclear and chip business, whether the elevator business and some of Toshiba\'s listed subsidiaries will be sold.
\"For one of Japan\'s oldest businesses, it\'s a humiliating twist, it makes the country\'s first light bulb and develops into a behemoth, everything from washing machines and medical equipment to computers and nuclear power plants is made by it.
Toshiba will not be able to announce its results for the most recent quarter ended March 14 until December. 31.
For the entire fiscal year ended March 31, Toshiba expects a net loss of 390 billion yen, reversing the prospect of a profit of 145 billion yen in November.
By contrast, the loss is expected to be 262 euros.
Analysts surveyed by Bloomberg forecast an average of 7 billion yen. —