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Toshiba has confirmed it will spin off its memory business as the company is faced with a multi-billion writedown in its nuclear business.

The company said in a statement it will seek approval from shareholders for the spin off in late March with the split to be effective from 31 March.

“Splitting off the Memory business into a single business entity will afford it greater flexibility in rapid decision-making and enhance financing options,” the statement said.

The sale of the profitable memory chip business with the expected price of $1.8 billion is seen by analysts as a “fire sale price tag.”

Toshiba’s shares were up as much as 4.45 per cent in Tokyo. The company’s stock is down 43 per cent since its December high.

The company defined the memory business as including the solid state drives business but excluding its image sensor business and said it it considering the assets to be transferred in the split.

Potential suitors for the business include Canon and Western Digital.

Analysts expect the size of the write down for Toshiba’s nuclear business at between $4bn and $7bn.

Copyright The Financial Times Limited 2018. All rights reserved.

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