Toshiba: Chip unit will finally be sold by June at the latest

30 March sale deadline might be missed as Chinese regulators take their time

Toshiba, the troubled Japanese conglomerate, will complete the $18 billion sale of its memory-chip business by June at the latest - missing its original 30 March deadline, the end of the financial year in Japan.

The company blamed the length of time that it has taken awaiting regulatory approval from China. Regulatory reviews in China typically take at least six months to conduct.

However, the imperative to get the deal through by the end of the financial year has been much reduced following a series of cash injections.

Speaking to reporters today, Yasuo Naruke, the head of Toshiba's memory-chip business said that the company had been working to get the deal closed by the end of the month, but that it could be April, May or June before the deal is finally closed.

The sale of the memory chip business - in which Toshiba will retain a dominant stake - is required to provide funds to plug a blackhole in the company's finances following the bankruptcy of its Westinghouse nuclear power development subsidiary in the US.

The buyers of the business is a consortium led by private equity outfit Bain Company, with Japan's Hoya Corporation persuaded to come on board to maintain a majority Japanese corporate ownership alongside Toshiba.

The deal is also backed by South Korean chip maker SK Hynix, as well as device maker Apple. It is involved in the deal in order to help maintain its access to flash memory chips and DRAM at a time when both are in short supply.

Disk-drive maker Seagate Technology and Kingston Technology are also financially backing the deal, for the same reasons as Apple.

There are only a handful of players involved in memory chip production in a market dominated by Apple's rival, Samsung, which has a market share of more than 40 per cent. Toshiba is the second-biggest player after Samsung, with Western Digital third, followed by US manufacturer Micron Technology, SK Hynix and Intel.

Toshiba Memory Corporation has been the source of most of Toshiba's earnings in recent years, according to Reuters.