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| Toshiba to sell chip unit for $18bn to plug losses | Toshiba to sell chip unit for $18bn to plug losses |
| (about 11 hours later) | |
| Toshiba has sold its prized semiconductor business to a group led by US private equity firm Bain Capital in a bid to keep its struggling business afloat. | Toshiba has sold its prized semiconductor business to a group led by US private equity firm Bain Capital in a bid to keep its struggling business afloat. |
| The $18bn (£13.3bn) deal is designed to cover billions of dollars of losses incurred in Toshiba's US nuclear unit. | The $18bn (£13.3bn) deal is designed to cover billions of dollars of losses incurred in Toshiba's US nuclear unit. |
| The Japanese firm was almost delisted this year after delaying the publication of its financial results. | The Japanese firm was almost delisted this year after delaying the publication of its financial results. |
| It said the deal, if approved, would ensure it remained public. | It said the deal, if approved, would ensure it remained public. |
| Toshiba is the world's number two chipmaker and its Toshiba Memory unit accounts for about a quarter of its revenue. | Toshiba is the world's number two chipmaker and its Toshiba Memory unit accounts for about a quarter of its revenue. |
| Bain Capital has partnered with South Korea's SK Hynix Inc and brought in US buyers of Toshiba chips such as Apple and Dell in order to buy the division. | Bain Capital has partnered with South Korea's SK Hynix Inc and brought in US buyers of Toshiba chips such as Apple and Dell in order to buy the division. |
| However, there is uncertainty over whether rival bidder Western Digital will walk away from the deal amicably. | However, there is uncertainty over whether rival bidder Western Digital will walk away from the deal amicably. |
| The data storage firm - which runs a joint venture with Toshiba in the US - was tipped as favourite to buy the business as recently as this week. | The data storage firm - which runs a joint venture with Toshiba in the US - was tipped as favourite to buy the business as recently as this week. |
| "We are disappointed that Toshiba would take this action despite Western Digital's tireless efforts to reach a resolution that is in the best interests of all stakeholders," the company said in a statement on Wednesday. | |
| It has previously taken legal action against Toshiba, arguing that the deal cannot happen without its consent. | It has previously taken legal action against Toshiba, arguing that the deal cannot happen without its consent. |
| On Wednesday Western Digital launched its latest legal attack against its joint-venture partner. The firm filed new arbitration requests against Toshiba for moving to invest in a flash memory production line without its help. | |
| Plugging losses | Plugging losses |
| Toshiba has been under pressure to clinch a deal in order to order to shore up its balance sheet by the end of its financial year next March. | Toshiba has been under pressure to clinch a deal in order to order to shore up its balance sheet by the end of its financial year next March. |
| In a statement, it said the sale of Toshiba Memory would boost its finances by 740bn yen (£5bn) after taxes. That would pull it out of negative shareholder equity, key to ensuring it remains a listed entity. | In a statement, it said the sale of Toshiba Memory would boost its finances by 740bn yen (£5bn) after taxes. That would pull it out of negative shareholder equity, key to ensuring it remains a listed entity. |
| The firm has incurred billions of dollars of losses at its US nuclear unit Westinghouse, which filed for bankruptcy in March. | The firm has incurred billions of dollars of losses at its US nuclear unit Westinghouse, which filed for bankruptcy in March. |
| The business, bought in 2006, had suffered years of cost overruns at its reactors and a downturn in global demand for nuclear energy. | The business, bought in 2006, had suffered years of cost overruns at its reactors and a downturn in global demand for nuclear energy. |
| The problems led Toshiba to delay the release of its financial results in May, as it struggled to secure sign-off from its auditors. | The problems led Toshiba to delay the release of its financial results in May, as it struggled to secure sign-off from its auditors. |
| It finally published them in August, reporting heavy losses of $8.8bn for the last financial year. | It finally published them in August, reporting heavy losses of $8.8bn for the last financial year. |