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Toshiba: If Memory Chip Production Spin-off Fails, IPO May Be Solution

Raevenlord

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The Financial Times has reported that Toshiba is considering a last-ditch effort towards producing liquidity, should its memory chip production business spin-off to Bain Capital not be allowed to complete prior to the end of March, in the face of antitrust scrutiny delays. Should that be the case, Toshiba would be in a dire situation, as the spin-off development has clearly shown (remember that Toshiba went from a 20% stake spin-off to a 100% spin-off due to increasing concerns with the company's outstanding debt and lack of liquidity).

Should that be the case, the company is reportedly considering an IPO as one of its contingency plans, the Financial Times reports, citing sources familiar with the plans. If the acquisition by Bain Capital fails to win regulatory approval by March 31, Toshiba is no longer bound to the deal's terms, sources familiar with the situation have told Reuters. The Financial Times further added that some analysts - and Toshiba shareholders - favor this contingency plan over the existing deal - and apparently there's some sentiment towards the same in the financial markets at large, as Toshiba shares hit a three-month high in morning trade, at one point rising as much as 4.7 percent, after these IPO plans started being made public. If Toshiba's board wasn't considering an IPO before, they sure are more likely to do so now.



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