Toshiba Memory to Buy Out Apple, Dell -- WSJ
May 21 2019 - 3:02AM
Dow Jones News
By Kosaku Narioka
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (May 21, 2019).
TOKYO -- Apple Inc., Dell Technologies Inc. and two other U.S.
technology companies are set to give up their preferred shares in
Japanese chip maker Toshiba Memory Holdings Corp. for more than $4
billion under a refinancing plan, according to people familiar with
the plan.
The U.S. companies, which are customers for Toshiba Memory's
semiconductors, helped a Bain Capital-led consortium take over the
chip maker from former parent Toshiba Corp. in June, preventing
Western Digital Corp. from taking control of its memory joint
venture with Toshiba. A takeover by Western Digital might have
further consolidated a market in which Samsung Electronics Co. has
already established a dominant presence.
A package of Yen1.3 trillion ($11.8 billion) in financing to be
in place soon from Japanese banks would enable Toshiba Memory to
buy out the preferred shares from the four American companies,
according to the people. A simplified capital structure would also
make it easier for Toshiba Memory to list itself, one of the people
said. The listing would allow the capital-intensive chip business
to access funds from the public-equity market.
Apple, Dell, Kingston Technology Co. and Seagate Technology PLC
are set to sell their preferred shares back to Toshiba Memory for
about Yen500 billion yen ($4.5 billion) by the end of May,
according to the people familiar with the plan. Together those
companies made a few hundred million dollars on their investments,
one of the people said. Apple and Kingston declined to comment.
Dell and Seagate didn't respond to requests for comment.
Toshiba Memory aims for a listing in Tokyo near the end of the
year or at the beginning of next year, according to one person
involved with the planning, with the timing dependent on market
conditions for semiconductors and public equities. Some bankers
have said the listing would take place this year.
A recent slump in chip prices means now wouldn't be the best
timing for a listing, the person said.
Under the refinancing plan, three major Japanese banks would
lend Yen1 trillion, and the government-owned Development Bank of
Japan Inc. would invest in preferred shares worth Yen300 billion,
replacing existing bank loans and the preferred shares owned by the
four American companies, according to the people familiar with the
plan.
The refinancing doesn't change the ratio of voting rights: 49.9%
for Bain Capital; 40.2% for Toshiba; and the remaining 9.9% for
Japanese optical product maker Hoya Corp.
Write to Kosaku Narioka at kosaku.narioka@wsj.com
(END) Dow Jones Newswires
May 21, 2019 02:47 ET (06:47 GMT)
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