Toshiba likely to miss earnings again, bidders mass for chip units

Toshiba chips
Toshiba's used-memory chips are seen at an electronics shop in Tokyo. REUTERS/Kim Kyung-Hoon/Files

TOKYO (Reuters) – Toshiba Corp will likely miss a third deadline to report its quarterly business results, two sources told Reuters, forcing the Japanese conglomerate to ask for a fresh extension or face a possible delisting from the Tokyo Stock Exchange.

A third postponement of the October-December earnings, past the latest deadline of April 11, looks necessary because Toshiba’s auditor, PricewaterhouseCoopers Aarata LLC, has questions about results for the business year through March 2016, said the sources. One of the sources has direct knowledge of the delay and the other was briefed on the matter.

Toshiba also may not be able to decide the favoured bidder or group for its semiconductor business by its general shareholder meeting in late June, said another person with direct knowledge of the matter. He had previously said the decision would be made in May, or at least before the shareholder meeting.

Toshiba and PwC officials could not be reached for comment in Tokyo outside business hours.

The Japanese conglomerate, which only recently emerged from a huge accounting scandal, has been dragged down by billions of dollars of cost overruns at its former U.S. nuclear unit, Westinghouse Electric Co.

Disagreements with auditors forced the company to postpone its earnings release in February and again in March. After April 11, Toshiba will have eight working days to publish its results for the three months that ended Dec. 31 unless it can persuade regulators at the Ministry of Finance to give it more time.

Despite some progress in tackling writedowns at Westinghouse, a new delay to the Japanese parent’s earnings announcement would underscore the seriousness of the financial crisis that threatens the 144-year old company. For the business year ended Friday, Toshiba forecasts a net loss of 1 trillion yen (US$9 billion).

Westinghouse on Wednesday filed for Chapter 11 bankruptcy protection from creditors in New York, a move by Toshiba to fence off losses at the unit it bought in 2006 for $5.4 billion. The filing marks the start of what will likely be lengthy and complex negotiations with creditors and customers that could embroil the U.S. and Japanese governments.

Toshiba’s shareholders at an extraordinary meeting in Japan on Thursday agreed to split off the company’s profitable NAND flash memory unit, green-lighting a plan to sell most or all of the business to raise at least 1 trillion yen (US$9 billion) to cover U.S. nuclear unit charges that threaten the conglomerate’s future.

Apple Inc, Inc and Google have joined bidding for Toshiba’s NAND flash memory unit, vying with others for the Japanese firm’s prized semiconductor operation, the Yomiuri Shimbun daily reported on Saturday.

The Yomiuri newspaper said bidding prices from Apple, Amazon or Google, owned by Alphabet Inc, were not known.

The Nikkei business daily reported on Friday that U.S. private equity firm Silver Lake Partners and U.S. chipmaker Broadcom Ltd have offered Toshiba about 2 trillion yen ($18 billion) for the unit.

About 10 potential bidders are interested in buying a stake in the microchip operation, a source with knowledge of the planned sale told Reuters earlier.

Suitors include Western Digital Corp, which operates a chip plant with Toshiba in Japan, Micron Technology Inc, South Korean chipmaker SK Hynix Inc and financial investors.

Toshiba officials were not immediately available for comment.

(Reporting by Kentaro Hamada, Taro Fuse and Kiyoshi Takenaka; Additional reporting by Makiko Yamazaki; Writing by Tim Kelly; Editing by William Mallard, Mark Potter and Kim Coghill)

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