Western Digital-led group offers $17.4 bn for Toshiba chip unit

Western Digital is set to offer 150 bn yen through convertible bonds and will not seek voting rights

Reuters  |  Tokyo 

Toshiba Chip
Toshiba's lenders including Mitsui Banking Corp would also extend around 700 billion yen in loans

A consortium that includes is offering 1.9 trillion yen ($17.4 billion) for Corp's memory chip business, which the Japanese conglomerate is trying to sell to cover losses from its US nuclear business, sources said on Thursday.

is set to offer 150 billion yen through convertible bonds and will not seek voting rights in the business, the sources who were familiar with the deal said.

The consortium also includes the US private equity firm KKR & Co as well as the state-backed and Development Bank of Japan, all of which will offer 300 billion yen each for the chip business, the sources said.

Under the proposal, Toshiba's lenders including and would also extend around 700 billion yen in loans, they said.

Other Japanese will also invest around 50 billion yen to ensure domestic firms hold a combined 60 percent stake, the sources said, adding that itself would keep a 100 billion yen stake in the business.

said it could not comment on discussions with potential suitors for the chips business. said it could not comment immediately, while KKR declined to comment. The sources requested anonymity because the talks were confidential.

Reuters has reported earlier that the group was offering around 2 trillion yen but it was unclear how much each party in the group was prepared to offer and whether would insist on obtaining voting rights.

Sources have said that wants to reach a deal by the end of the month and close the sale by the end of the fiscal year in March to ensure it does not report negative net worth, or liabilities exceeding assets, for a second year running. This could result in a delisting from the

Given regulatory approvals could take more than six months, the company has been hoping to reach a deal by the end of the month to ensure it can close the sale in time.

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