EXCLUSIVE: Govt-Backed Bodies to Start Talks to Invest in Toshiba Memory

June 2, 2018

Tokyo- Two Japanese government-backed bodies plan to start talks within this month to invest in Toshiba Memory Corp., which Toshiba Corp. has sold to a consortium led by U.S. investment fund Bain Capital, informed sources said Friday.

Innovation Network Corp. of Japan and the Development Bank of Japan will hold negotiations with Bain Capital, now the largest shareholder of the flash memory company, and others.

The move is in line with the Japanese government's position that Toshiba's flash memory technology should be kept at home.

INCJ and the DBJ had initially considered investing 300 billion yen each in Toshiba Memory, but they skipped the investments when the sale contract was concluded in September 2017, due to uncertainty over the course of a then court dispute between Toshiba and its U.S. business partner, Western Digital Corp., on the chip unit sale.

Their possible investments would now likely fall below 300 billion yen, the sources said.

All shares in the chipmaker have been transferred from Toshiba to a special purpose company in which Bain Capital has a stake of 49.9 pct in terms of voting rights, followed by Toshiba, with 40.2 pct, and Japanese precision equipment maker Hoya Corp. <7741>, with 9.9 pct.

The government-affiliated investment fund and lender will discuss matters related to their capital participation with parties concerned, including the idea of acquiring shares from the SPC owners other than Toshiba, the sources said.

Toshiba Chief Executive Nobuaki Kurumatani told a press conference in mid-May that his company would decide whether to reduce its voting rights in Toshiba Memory after monitoring market chip prices. Jiji Press