In a sudden turn of events, Reuters reports that manufacturing partners Western Digital and Toshiba are now at odds over an $18 billion sale of the Japanese company’s semiconductor business.
The latest legal action by the U.S. firm, which jointly invests in Toshiba’s main chip plant, comes in the wake of the Japanese conglomerate’s decision last week to sell the unit to a consortium led by Bain Capital LP and South Korean chipmaker SK Hynix (000660.KS).
The injunction seems to be coming at the worst possible time for Toshiba. Reuters reports that “a signed deal would come not a moment too soon as it needs to raise billions of dollars to cover liabilities arising from its now bankrupt U.S. nuclear unit Westinghouse before the end of the financial year in March. If it fails to do that, it could be delisted.” in addition to these worries, the regulatory reviews “usually take at least six months” so they will be very close to their deadline.
Investors in Toshiba should have a long think about the future of the company. It has gone through some serious setbacks recently and this latest story looks like it could threaten to deal them a fatal blow. Adapt your strategy accordingly.
To learn more go to reuters.com. For more financial news delivered straight to your inbox, sign up for our free newsletter.
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