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4-Traders Homepage  >  Equities  >  KOREA EXCHANGE  >  SK Hynix Inc    000660   KR7000660001

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Exclusive - Toshiba tells banks chip deal delayed as Apple yet to approve

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09/25/2017 | 06:38pm CEST
FILE PHOTO: Logo of Toshiba Corp is seen outside an electronics retail store in Tokyo

Toshiba Corp (>> Toshiba Corp) told its main banks on Monday it has not signed the $18 billion sale of its semiconductor business because Apple Inc (>> Apple), a member of the buyer group, has not agreed on key terms, two people involved in the deal said.

Toshiba Corp (>> Toshiba Corp) told its main banks on Monday it has not signed the $18 billion sale of its semiconductor business because Apple Inc (>> Apple), a member of the buyer group, has not agreed on key terms, two people involved in the deal said.

The struggling Japanese conglomerate announced last Wednesday it had chosen a consortium led by U.S. private equity firm Bain Capital LP to buy the prized chip unit - a move that would end a nine-month sale process and plug a vast hole in Toshiba's finances, preventing it from being removed from trading on the Tokyo Stock Exchange.

But the signing of the deal to sell the world's No. 2 producer of NAND memory chips, initially expected the following day, has dragged on, forcing Toshiba to explain the predicament to its bankers on Monday, the people said.

They told Reuters that Toshiba asked the lenders to roll over 680 billion yen (4.50 billion pounds)in credit lines set to expire on Sept. 30.

The lenders have been demanding that Toshiba sign a definitive agreement with the Bain-led group, which also involves South Korean chipmaker SK Hynix Inc (>> SK Hynix Inc), as a condition for the funding.

Details of the issues with Apple couldn't immediately be ascertained.

Toshiba said in a statement to Reuters: "While we cannot comment on the detail of the deal procedure, we aim to sign the agreement with the purchaser as early as possible."

Apple didn't immediately reply to an emailed request for comment.

Press representatives for Sumitomo Mitsui Banking Corp and Mizuho Bank, the biggest of Toshiba's seven main lenders, couldn't immediately be reached outside office hours.

Apple, which is considering investing in the unit through preferred shares, has not submitted the necessary commitment letter, said the people, who asked not to be identified as the talks were private.

The consortium also has not received approval from the lenders on 600 billion yen ($5.4 billion) in financing for the sale, due to legal challenges posed by unsuccessful bidder and joint-venture partner Western Digital Corp (>> Western Digital), the people said.

California-based Western Digital has taken Toshiba to court to stop any sale without its consent.

(Reporting by Taro Fuse; Writing by Makiko Yamazaki; Editing by William Mallard and Ian Geoghegan)

By Taro Fuse

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Financials ( KRW)
Sales 2017 29 334 B
EBIT 2017 13 303 B
Net income 2017 10 480 B
Finance 2017 4 420 B
Yield 2017 1,27%
P/E ratio 2017 5,46
P/E ratio 2018 5,22
EV / Sales 2017 1,81x
EV / Sales 2018 1,48x
Capitalization 57 512 B
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 36
Average target price 91 017  KRW
Spread / Average Target 15%
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NameTitle
Sung-Wook Park Vice Chairman & Chief Executive Officer
Joon-Ho Kim Co-President, Director & Head-Management Support
Myung-Young Lee Senior Managing Director & Head-Finance
Sang-Seon Lee Senior MD & Head-Production and Technology
Seung-Ho Pi MD & Head-Research and Development
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