Toshiba Corp. announced a delay Wednesday in closing a deal with a Japan-U.S.-South Korean consortium on the sale of its chip unit, saying it needs more time to reach an agreement.
The Japanese conglomerate had said it would close the deal by Wednesday when it holds its shareholders' meeting. Last Friday, company President Satoshi Tsunakawa said it was possible to finalize the deal on schedule after selecting the group as a preferred bidder.
"It is taking time to reach a consensus because the consortium comprises multiple parties, and closure was not achieved by Toshiba's primary target date," Toshiba said in a statement prior to the shareholders' meeting.
"Toshiba intends to continue the negotiation toward reaching a definitive agreement at the earliest possible date, and will announce this in a timely manner once the agreement is closed," it said.
Toshiba, hit by its worst-ever financial crisis stemming from its now bankrupt former U.S. subsidiary, hopes to sell Toshiba Memory Corp. for 2 trillion yen ($17.8 billion), enough to eliminate its negative net worth and avoid being delisted from the Tokyo Stock Exchange.
The Japanese company has chosen as its preferred bidder a consortium consisting of the state-backed Innovation Network Corp. of Japan, the state-owned Development Bank of Japan, U.S. investment fund Bain Capital, and chipmaker SK Hynix Inc. of South Korea.
But the planned sale faces strong opposition from U.S. chipmaker Western Digital Corp., Toshiba's joint venture partner, which hopes to keep the chip unit from falling into competitors' hands.
Western Digital has asked a U.S. court to block the deal and is also seeking arbitration with an international court on the grounds that the sale of the chip unit without its consent would breach their joint venture contract.
The California-based company said Monday it resubmitted a last-ditch bid for the chip unit with U.S. investment fund Kohlberg Kravis Roberts.
