Toshiba (TOSYY) was the biggest gainer in Tokyo Monday on reports the Japanese electronics-to-nuclear conglomerate is attracting interest for investments in its semiconductor business that it plans to spin off as it seeks paths to rebuild a business mired by accounting scandals and cost overruns.
Shares in the Tokyo-based company closed Monday up 9% at ¥268.9, although it has lost nearly 40% in value over the past month.
Japanese media reported late Friday that about ten companies have expressed interest in investing in the semiconductor business that Toshiba plans to spin-off to boost its fragile capital that could be eroded partly by greater-than-expected write-downs on a newly acquired U.S. nuclear unit. Toshiba's shareholder capital stood at ¥363.2 billion ($3.2 billion) at the end of September 2016, down by a third from the year ended March 2015.
Parties interested in investing in the chip business include not only Japanese technology peers such as Canon (CAJ) , Tokyo Electron (TOELY) but also investment funds such as Permira Advisers and Bain Capital, according to the Japanese daily Asahi Shimbun. Western Digital (WDC) has also been named as a potential investor. Toshiba expects to secure several hundreds of billions of yen by spinning off its semiconductor business and establishing a new company.
The semiconductor business is one of the few bright spots for Toshiba, and is one of the main reasons it revised up its earnings several times for the ongoing year. In the first half, the storage & electronic devices solutions segment saw operating profit margin advance 9.8%.
