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Angry Shareholders Give Go Ahead To Toshiba For Chip Unit Sale

Angry Shareholders Give Go Ahead To Toshiba For Chip Unit Sale
The way for a sale to raise at least $9 billion to cover U.S. nuclear unit charges that threaten the conglomerate's future was paved for Toshiba Corp as its shareholders agreed to split off its prized NAND flash memory unit on Thursday.
While one of the shareholders at the extraordinary general meeting noted that managers had only last year described the chip and nuclear businesses as core units at the conglomerate as the meeting saw angry shareholders vent at CEO Satoshi Tsunakawa just a day after Westinghouse filed for bankruptcy.
"How can something that was supposed to be a pillar turn into a hole," said the shareholder, asking Tsunakawa about the company's nuclear business.
"Toshiba has become a laughingstock around the world. You have no clue what's going on," shouted another.
Toshiba has said it is selling most or even all of a unit that is the world's second-biggest producer of NAND chips and expects to book an annual net loss of 1 trillion yen ($9 billion) for this business year on a writedown at Westinghouse.
Initial bids for the sale closed on Wednesday.
About 10 potential bidders are interested, a source with knowledge of the planned sale was quoted in the media. South Korean chipmaker SK Hynix Inc and financial investors, Micron Technology Inc, and Western Digital Corp which operates a chip plant with Toshiba in Japan are among those suitors.
Sources have said, declining to be identified as they were not authorized to speak on the matter publicly,  that the government-backed Innovation Network Corporation of Japan, and Development Bank of Japan are expected to enter later bidding rounds as part of a consortium.
Expected to place an offer which is likely to be the highest bid is Foxconn, the world's largest contract electronics manufacturer, a separate source said. Due to its deep ties with China, the Japanese government is likely to block a sale to Foxconn, other sources have said.
However Toshiba’s woes are far from over even though the bankruptcy Westinghouse filed for bankruptcy and the vote, which won the backing of more than two-thirds of shareholders, are seen as steps forward in Toshiba's struggle to stay in business.
This is so because a discussion that could embroil the U.S. and Japanese governments has to be started as Toshiba now faces months of complex negotiations over the fate of its U.S. nuclear business for Westinghouse which it had bought in 2006 for $5.4 billion.
To help finance some the construction of four reactors in the United States, the U.S. government has guaranteed loans of $8.3 billion.
Particularly if the debacle sparks criticism from President Donald Trump of Japanese corporations in the United States, putting American taxpayers on the hook for any losses related to Westinghouse's failure would be an embarrassment for Japanese Prime Minister Shinzo Abe,
Japan's Trade Minister Hiroshige Seko agreed to share information on developments with his U.S. counterparts Energy Secretary Rick Perry and Commerce Secretary Wilbur Ross during talks in Washington this month.
In April when Vice President Mike Pence visit for bilateral economic talks, senior officials from both countries will get a chance to discuss Toshiba. according to a Japanese government official with direct knowledge of preparations, Ross will travel with Pence.

Christopher J. Mitchell

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