Toshiba’s memory division sale suffers another delay

2017.07.17 13:59:28 | 2017.07.17 14:00:21
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A California court has put on hold its decision on an injunction request by Western Digital Corporation (WDC) to block the sale of Toshiba’s memory division, giving another headwind to a multinational preferred bidder comprising of South Korea’s memory chipmaker SK Hynix and U.S. and Japanese entities. Some cautiously say the situation would be disadvantageous for the Korea-US-Japan alliance, while the sale is continuously challenged by WDC, Toshiba’s long-term memory partner.

Overseas media reported that San Francisco Superior Court Judge Harold Kahn delayed a ruling on WDC’s request last Friday, while suggesting that Toshiba should work to persuade WDF further by giving a two weeks’ advance notice of the sale.

But nothing was determined on whether WDC has a right to reject the sale when it is notified. In the meantime, the judge ordered Toshiba not to complete the sale until a July 28 hearing. The court did not accept the WDC’s injunction request but the hearing postponement and the two weeks’ notice suggestion could be interpreted as a swing factor for WDC in a tight contention with the alliance.

In a previous court hearing held a week ago, the judge favored WDC, ruling Toshiba should temporarily allow WDC employees to access its shared databases.

The international alliance had been scheduled to sign a definitive contract before Toshiba’s shareholder’s meeting on June 28, but it could take one more month under the current situation. Some analysts say SK Hynix could be replaced by WDC. Earlier, the Nihon Keizai Shimbun reported Toshiba resumed talks with WDC and Foxconn of Taiwan.

Japan’s JiJi Press reported SK Hynix decided it would drop a plan to convert its lending into equity and instead remain as a lender, while the Asahi Shimbun reported SK Hynix might extend loans of up to 520 billion yen or about 5.2 trillion won. But this scenario would be unrealistic because the waiver would bring no actual benefit to SK Hynix, other analysts say. SK Hynix did not give specific comments on the reports.

By Hwang Hyung-gyu and Kim Dong-eun

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]

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