Japan’s Toshiba to gradually sell stake in Kioxia after ex-chip unit’s IPO

FILE PHOTO: A logo of Toshiba Corp is seen on a printed circuit board in this photo illustration taken in Tokyo July 31, 2012. REUTERS/Yuriko Nakao/File Photo

Toshiba Corp plans to gradually unwind its 40% stake in Kioxia Holdings after the world’s second-largest flash memory chip firm lists its shares in an IPO later this year, two people familiar with the matter said on Saturday.

The Japanese industrial conglomerate is considering distributing about half or more of after-tax proceeds from the sale back to shareholders, the sources told Reuters, asking not to be identified because the matter is private.

Toshiba said in a filing with the Tokyo stock exchange on Saturday that it was considering various possibilities for shareholder returns, such as the handling of assets and reviewing its portfolio.

The company said nothing has been decided over its stake in Kioxia, the former flash memory chips unit it sold to a consortium led by U.S. private equity firm Bain Capital for $18 billion in 2018.

Toshiba bought its Kioxia stake as part of that deal.

The initial public offering of Kioxia could be Japan’s biggest listing this year, sources have said.

Japanese media reports have estimated market valuation to reach $32 billion in an IPO as early as October, although the coronavirus outbreak has created uncertainty over the timing and valuation of the IPO.

Many overseas fund investors are urging Toshiba to sell the stake on the grounds that flash memory chips, used in smartphones and data storage servers, are a highly volatile business that could sway Toshiba‘s earnings, the source said.

Toshiba has been facing pressure from activist funds agitating for changes since the company sold 600 billion yen ($5.6 billion) of stock to dozens of foreign hedge funds during a crisis stemming from the bankruptcy of the U.S. nuclear power unit in 2017. Nearly 70% of its shareholders are non-Japanese.

Reuters

 

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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