Bain, Permira interested as Toshiba flags chip biz stake sale

Japan's struggling Toshiba Corp has started the process to sell a minority stake in its flash memory chip business worth several billion dollars, and funds Permira and Bain Capital have expressed interest, Kyodo news agency reported.

The sale is aimed at helping the industrial conglomerate deal with an upcoming writedown for its US nuclear business - a charge that local media have said could come in at a bigger-than expected USD6 billion.

A Toshiba spokesman said the company is considering a spin-off of its memory chip business and a partial stake sale, but that it cannot comment on the specifics of the process.

Toshiba is expected to sell 20 to 30 percent of the chip business, Kyodo reported, citing unidentified sources.

A source familiar with matter said this week that potential buyers for the stake that Toshiba is considering include business partner Western Digital Corp. The California-based data storage company operates a Japanese NAND flash memory plant with Toshiba.

Representatives for Permira and Bain Capital were not immediately available for comment. Western Digital has declined to comment.

Industry sources have said Toshiba's chip business could be valued at more than 1 trillion yen (USD8.7 billion), although some estimates for the unit have ranged as high as 2 trillion yen.

Shares in Toshiba plunged 16 percent on Thursday on the reports of the bigger-than-expected writedown, giving the laptops-to-nuclear conglomerate a market value of just USD9 billion. In early Friday trade, they were up 1 percent.