The company planned to sell the chip-making unit to cover up the write down from its nuclear business.
Japanese technology company, Toshiba may delay the sale of its chip-making business as it is looking to sell the entire business or majority stake, instead of earlier plan of 20%.
Toshiba said that it estimated a write down of ¥712.5bn ($6.23bn) from its nuclear business for the period between April to December, last year. By December, its net worth had fallen by ¥191.2bn ($1.68bn).
In order to raise cash, the company said that it had plans to sell majority or the entire chip-making operations.
Since there are fears that it may to be sold at a bargain price if it is sold now, the company is now to delay the deal to get a higher price, Japan Times reported.
According to an estimate, the chip-making business is worth about ¥2 trillion ($17.46bn). For the Japanese conglomerate, the chip business has been a major contributor of revenue. In last September, it earned about ¥78.3bn ($690m) and it contributed to 81% of its overall operating profit.
It is the second largest producer of NAND flash memory, only after Samsung and these chips are used in mobile devices.
Chip-manufacturing companies such as SK Hynix, Micron Technology, Foxconn and Bain Capital are known to be some of the bidders to buy Toshiba’s profitable business.
The company also noted that it might sell its nuclear business and only provide equipment and engineering services. A possibility of the sale of Westinghouse Electric, its US nuclear subsidiary, also cannot be ruled out.
Toshiba’s share prices have also fallen by 13%, the lowest since last April and it is down 25% this year after new accounting challenges were disclosed.
At the same time, the company seems to be supported by its creditors Sumitomo Mitsui Banking, Mizuho Financial Group and Sumitomo Mitsui Trust Bank, who have met with Toshiba’s officials, Bloomberg noted.
The sale of the chip unit is expected to raise concerns from the Japanese government, as one of the government officials noted that flash memory chip business is extremely important for the country’s growth strategy.