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Toshiba: shareholders OK chip unit sale, angry EGM

Thursday, March 30, 2017 - 01:49

Toshiba shareholders agree to split off its prized NAND flash memory unit, paving the way for a sale to raise at least $9 billion to cover U.S. nuclear unit charges that threaten the conglomerate's future. As David Pollard reports, some shareholders are deeply unhappy at the direction the company is taking.

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It's sunny outside as Toshiba's shareholders gather for their EGM. Inside, the storm clouds are brewing. Shareholders agreeing to split off Toshiba's prized NAND flash memory unit - yes ... But split themselves over Toshiba's overall direction - many venting their anger. (SOUNDBITE) (Japanese) WOMAN WHO HAS BEEN A TOSHIBA SHAREHOLDER FOR 10 YEARS, KAYOKO IWANO, SAYING: "I am not here just as a shareholder but also because I'm worried about the future of the company that I admire." (SOUNDBITE) (Japanese) 73-YEAR OLD FORMER TOSHIBA EMPLOYEE, KENJIRO ENDO, SAYING: "I made a living for 40 years at Toshiba. Business management was not this messed up while I worked there." All or part of what is the world's second biggest producer of NAND memory chips is up for grabs - potentially raising 18 billion dollars. More than enough to cover the nine billion dollars of losses that stem from Toshiba's Westinghouse US nuclear charges. And a sale is seen as likely: Western Digital, Micron and SK Hynix and others could be potential bidders. Electronics giant Foxconn might also place an offer. As for Westinghouse: the bankruptcy declared this week seen too as a positive - for staunching the flow of future losses. SOUNDBITE (English) JAMES HUGHES, CHIEF MARKET ANALYST, GKFX, SAYING: "Before, it was open-ended ...Now we know the end game: Westinghouse files for bankruptcy, the downside can be limited. If that downside is too bad, we know that's then going to cause more issues, but at least we will finally know what the overall downside can be for Toshiba and then it can be moved on." Toshiba's shares were up over two per cent on Wednesday on that belief. But they're down by half since its nuclear problems surfaced last year. And the outlook still grim - as the Japanese firm faces a messy and complex process to extract itself from its US liabilities.