REFILING: UPDATE1: Japan may inject public money to turn around Toshiba: sources
A Japanese consortium including the state-backed Innovation Network Corp. of Japan and the state-owned Development Bank of Japan is mulling investing in Toshiba Corp.'s memory chip business, sources close to the matter said Friday.
Toshiba Memory Corp., which will be established through the spinoff of its profitable chip business, could be backed by public funds in order to protect the country's key technology and keep the company's memory chip unit out of foreign hands.
Toshiba is the world's second-biggest producer of NAND flash memory chips, after South Korea's Samsung Electronics Co. The chips are used in devices such as smartphones.
The INCJ and DBJ will participate in a bid for Toshiba's chip business, aiming to buy more than one third of the operation's shares to secure veto power.
Potential Japanese bidders include Toshiba's business partners while a U.S.-Japan consortium may also take part.
"The remaining roughly two-thirds of investment should be done by U.S. investment funds," one source close to the matter said.
The cash-strapped company has said it could sell a majority or even the entire stake of the operation to raise funds to bolster its financial standing.
Foreign entities in the United States, Taiwan, South Korea and China are also reportedly interested in the prized chip business.
Toshiba will start selecting a buyer with bids due on March 29.
Japanese industry minister Hiroshige Seko who held separate talks with Energy Secretary Rick Perry and Commerce Secretary Wilbur Ross in Washington, told reporters Thursday that the two secretaries said that the United States regards the fiscal stability of Toshiba as extremely important.
Seko said he agreed with them to share information about developments involving Toshiba and its troubled U.S. nuclear affiliate.
Seko met the secretaries two days after Toshiba said that filing for Chapter 11 bankruptcy protection by Westinghouse is one option, and that it will sell a majority of shares in the U.S. unit in fiscal 2017 starting in April.
Toshiba is reeling from huge losses related to its U.S. nuclear division. In February, the company said it was expecting a loss of 712.5 billion yen in its U.S. nuclear business for the nine months through December on an unaudited basis due to plant project delays leading to cost overruns.
On Tuesday, Toshiba once again pushed back the release of its financial results, a month after missing the initial deadline due to the need for more time to look into an accounting problem at Westinghouse.