For chip unit sale, Toshiba says unable to meet end-March deadline

“We will not be able to complete an $18 billion deal to sell its prized chip unit by an agreed deadline at the end of March, as we have not receive anti-monopoly approval from China”, said on Friday Toshiba Corp .

Toshiba can choose the option of walking away from the sale of the world’s No. 2 producer of NAND chips without penalty – a move that some investors have urged it to consider given that it failed to meet the deadline.

“We still plans to sell the unit, aiming to finalize the deal as soon as possible”, said in a statement the company .

Last year, Toshiba agreed to sell the chip unit to a consortium led by U.S. private equity firm Bain Capital to cover liabilities arising from its bankrupt U.S. nuclear unit Westinghouse.

But the conglomerate no longer needs the funds as much, because from a share issue to foreign investors late last year having raised $5.4 billion. Some activist shareholders oppose the sale, saying the $18 billion price tag undervalues the business and that Toshiba should renegotiate with the Bain group or consider an initial public offering.

The chip business currently accounts for most of the company’s profit, and Toshiba is struggling to grow other core businesses such as social infrastructure. Under the deal, it plans to repurchase 40 percent of the chip unit.

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