{"id":34496,"date":"2017-07-13T06:21:42","date_gmt":"2017-07-13T06:21:42","guid":{"rendered":"http:\/\/www.biphoo.com\/bipnews\/?p=34496"},"modified":"2017-07-13T07:04:56","modified_gmt":"2017-07-13T07:04:56","slug":"sk-hynix-ceos-stake-stand-off-muddies-toshiba-chip-sale","status":"publish","type":"post","link":"https:\/\/www.biphoo.com\/bipnews\/technology\/sk-hynix-ceos-stake-stand-off-muddies-toshiba-chip-sale.html","title":{"rendered":"SK Hynix CEO’s stake stand off muddies Toshiba chip sale"},"content":{"rendered":"

SK Hynix Inc (000660.KS) still <\/span>wants an equity stake in Toshiba Corp’s (6502.T) chip unit, it said on Wednesday, complicating a bid for the business by a consortium it is part of.<\/span><\/span><\/p>\n

Talks with a Japanese government-backed group chosen by Toshiba as a preferred bidder for its chip business have stalled due to what sources say are proposals by SK Hynix that its financing <\/span>be done via convertible bonds.<\/span><\/span><\/p>\n

In the first public <\/span>acknowledgement that it wants a stake in the world’s No. 2 NAND producer, SK Hynix chief executive Park Sung-<\/span>wook told reporters that it is continuing to negotiate the purchase and will not drop its equity plan.<\/span><\/span><\/p>\n

The preferred bidder group also includes the state-backed fund Innovation Network Corp of Japan, the Development Bank of Japan and U.S. private equity firm Bain Capital.<\/span><\/p>\n

But the stand-off resulted on Tuesday in Toshiba saying it was again talking with suitors Western Digital Corp (WDC.O) and Foxconn (2317.TW) due to the lack of progress.<\/span><\/p>\n

The embattled conglomerate does not want its South Korean rival to have an equity or management influence in the chip unit – a stance it has taken to satisfy a government that wants the technology to remain under domestic control.<\/span><\/p>\n

Some Japanese officials had hoped SK Hynix may back down from its demand for a stake, sources have said.<\/span><\/p>\n

Hit by massive cost overruns at its <\/span>now bankrupt U.S. nuclear unit Westinghouse, Toshiba needs billions of dollars in fresh loans to tide it over before it can complete the $18 billion <\/span>sale of the memory chip unit.<\/span><\/span><\/p>\n

It sold its medical equipment business to Canon Inc for $6 billion last year and its Landis+Gyr smart meters unit aims to raise up to $2.5 billion, but that will not be enough to plug the hole in its balance sheet.<\/span><\/p>\n

And although Japanese banking sources said on Tuesday that Toshiba has regained access to a $6 billion credit line, lenders have also imposed tough conditions.<\/span><\/p>\n

Toshiba has told creditors it will need 1 trillion yen in fresh loans during the current financial year through March, banking sources have said previously.<\/span><\/p>\n

Sources said Toshiba’s banks, which include Sumitomo Mitsui Banking Corp (8316.T) and Mizuho Bank (8411.T), allowed it to withdraw 100 billion yen ($880 million) in loans late last month but must seek permission every week to extend the loan, despite a previously-agreed commitment line of 680 billion yen.<\/span><\/p>\n

Another obstacle in the chip unit auction has been Toshiba’s strained ties with Western Digital, which bought SanDisk, Toshiba’s memory chip business partner, in May last year.<\/span><\/p>\n

Last month, Western Digital sought a U.S. court injunction to prevent Toshiba selling the chip unit without its consent. A hearing on that request is scheduled for Friday.<\/span><\/p>\n

The banking sources said they were worried the conflict could end up scuppering the sale as well as the chip business’ long-term prospects. One said he hoped that Toshiba and Western Digital would work to resolve their conflict.<\/span><\/p>\n

source:-https:\/\/www.reuters.com\/article\/us-toshiba-accounting-sk-hynix-idUSKBN19X0JS<\/span><\/p>\n

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