Silver Lake, Broadcom table $17.9-bn bid for Toshiba’s chip unit

US private equity firm Silver Lake Partners and US chipmaker Broadcom Ltd have tabled a ¥2 trillion  ($17.9 billion) buyout offer for Toshiba Corp's chip unit, the Nikkei business daily today reported.

Earlier media reports had said that several bidders  were interested in buying a stake, including South Korean chipmaker SK Hynix Inc, Western Digital Corp, Micron Technology Inc, and private equity firms.

Toshiba shareholders yesterday agreed to split off the company's prized NAND flash memory unit, paving the way for a sale to raise at least ¥1 trillion ($8.8 billion) from the sale of a majority stake in its flash memory chip business to save the group from the impact of a $6.3-billion write-down at its US nuclear business.

To facilitate the sale, Toshiba shareholders yesterday voted to spin off the chip unit, and Toshiba now wants to finalise the sale before a shareholder's meeting in June, the report said.

Toshiba had earlier not decided on the actual size of the stake sale, but is now reported to be ready to sell a majority stake or even its entire stake in the Nand memory chip unit, which makes memory chips for mobiles and tablets and is its most valuable business.

Toshiba's losses are likely to have exceeded its assets as of the end of December and it needed to raise funds to offset a likely multi-billion-dollar write-down on Westinghouse, its US nuclear power business.

The Tokyo-based electronics appliance maker's estimated loss from its nuclear business in the US stood at about ¥700 billion, while its capital stood at ¥360 billion at the end of September 2016.

If the loss in relation to its capital were to be reported in the company's financial statement for the October-December quarter, Toshiba would be in capital deficit.

If Toshiba's deficits were to exceed its assets as of 31 March, the end of its business year, the company's shares would be moved from the TSE's First Section to the Second Section.

In the event of Toshiba's failure to rectify the situation within a year of that date, its shares would risk getting delisted.