Toshiba Corp., facing billions of dollars of write-offs in its nuclear business, is considering spinning off its well-performing flash-memory unit to raise funds.
Kaori Hiraki, a spokeswoman for the Tokyo-based company said that Toshiba is considering an infusion of cash as part of the spinoff. While a spinoff is one of the options, nothing has been decided at the moment, Toshiba said in a statement. The company may sell a 20 percent stake in the chip operations for as much as 300 billion yen ($2.7 billion), the Nikkei newspaper reported.
The company’s shares jumped as much as 4.9 percent in Tokyo, paring a decline of more than 30 percent since mid-December, when it surprised investors with the disclosure that a U.S. nuclear construction unit may result in billions of dollars in losses. The unexpected write-down follows a profit-padding scandal in 2015 that led to record losses and prompted the company to cut staff and sell off businesses.
Flash memory used in smartphones and solid state disk drives is one of the few bright spots in Toshiba’s sprawling business portfolio. Memory chips generated 50.1 billion yen in profit in the fiscal first half, accounting for more than half of total operating profit in the period. The company has shared investments in the business with Western Digital Corp.
Toshiba originally estimated the acquisition would cost $87 million, but after a detailed accounting review said that figure may swell to several billions of dollars. Bank of America Corp. analysts estimated the deal may result in losses of $4.7 billion, potentially wiping out its shareholder equity. Toshiba said it will present more details after completing a review in the coming weeks.