Tokyo based Toshiba Corp is reportedly planning to sell its 40.2% stake in Kioxia Holdings, a flash memory chips firm, and distribute the profit among the shareholders. Sources close to the matter stated that the company wants to unwind its stake in a gradual manner, a process which would commence when the shares of the second largest flash memory chip company of the world are listed later this year.
According to the Japanese media, Kioxia could account for USD 32 billion when listed. Toshiba sold the first flash memory chips unit to a collaborative body led by Bain Capital for USD 18 billion, and it bought 40.2% stake of Kioxia.
Toshiba reportedly opposes both the proposals it received for new board directors. The proposals came from Effissimo Capital Management and 3D Opportunity Master Fund. The former firm is a Singapore based fund set up by ex-colleagues of Yoshiaki Murakami, an activist investor. Effissimo is one of its top shareholders as it holds 15% of the company’s stake.
As reported, Effissimo wants Toshiba to elect a co-founder from their firm and two others as outside directors. The latter firm wants Toshiba to elect two of its nominated members.
Toshiba said that the nominees in the board are people with in-depth understanding of many areas ensuring appropriate diversity.
Apparently, Toshiba is pressurized by activist funds since it gave away stocks’ worth USD 5.6 billion to foreign hedge funds to rehabilitate from a crisis. It had to sell its stocks to recover from the bankruptcy of its US nuclear power unit in the year 2017. Owing to this incident, it has 70% non-Japanese shareholders, cite credible reports.
As a result of the announcement of Toshiba, its shares went up by 5% in the afternoon trade on Monday.