Toshiba’s share price fell for a third consecutive session as the sale process of its prize memory chip division looked to have hit a hurdle and amid continued doubt over the company’s future as a going concern.
The troubled conglomerate warned on Tuesday of “substantial doubt” about its ability to continue as a going concern after it failed to persuade its auditor to sign off its third-quarter accounts.
In dire need of cash given an accounting scandal and a $6.3bn writedown on its US nuclear subsidiary, which filed for bankruptcy protection last month, Toshiba is trying to sell its prized Nand memory chip business.
That sale may have hit a hurdle with Western Digital saying in a letter the sale of the chip unit may violate the terms of its contract it has with Toshiba, according to two people with knowledge of the letter. The two companies have joint ownership of some of the chip unit’s facilities.
Toshiba is said to have narrowed bidders in its initial round of the sale process to Western Digital, Taiwan’s Hon Hai Precision Technology, South Korea’s SK Hynix and a consortium comprising US-based Broadcom and private equity firm Silver Lake Partners, according to a person involved in the talks.
The unit is expected to fetch north of ¥2tn ($18.4bn).
Shares in Toshiba were down 2.5 per cent on Thursday, facing a third straight day of declines. They had been down as much as 3.9 per cent in early trade.