Toshiba Corp.’s planned sale of its flash memory business may not come in time for the firm’s annual shareholders meeting in June, given the time needed to scrutinize bidders amid concerns that information technology might leak to competitors.

Toshiba Memory Corp., officially launched on Saturday, attracted nearly 10 potential buyers as of Wednesday last week, the deadline for the first round of competitive bidding. One company offered to buy Toshiba’s spinoff for close to ¥2 trillion, informed sources said.

That amount may be enough for Toshiba to resolve the negative net worth projected as at the end of fiscal 2016 last Friday. The highest bidder’s financing plan remains “unclear,” however, said a senior Toshiba official.

The government and ruling parties have expressed concerns that Chinese capital may be secretly funding the acquisition of the Toshiba unit, in an attempt to gain influence.

It is understood Toshiba will be examining all proposals closely, including how they are financed.

Since all of the bidders in the first round have been foreign companies, Toshiba is appealing to domestic firms to join the race.

There are continued calls by the government and business bodies for Japanese companies, state-backed Development Bank of Japan and Innovation Network Corp. of Japan to cooperate in acquiring a sufficient equity stake in the Toshiba flash memory business to keep the internationally competitive technology at home.

Under current circumstances, “it’s impossible to decide (the buyer of the spinoff) by the general shareholders meeting,” another Toshiba executive said.

But a delay in the sale of the unit could threaten Toshiba’s survival, as its shares are set to be delisted from the Tokyo Stock Exchange unless the company returns to a positive net worth by the end of the current business year through March 2018.

There is growing concern that Toshiba will for a third time miss the deadline for releasing its earnings report for April-December 2016. The deadline has been extended twice to April 11 owing to internal management issues at its loss-making U.S. nuclear business.

Toshiba would not be removed from the TSE immediately if regulators allow a third extension of the earnings report deadline.

By: DocMemory
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