CHIBA: Executives at crisis-hit Toshiba faced legions of angry shareholders Wednesday as the firm announced it has yet to clinch a deal to sell its prized chip business to a consortium of US, Japanese and South Korean investors.
The sale, reportedly worth about 2.0 trillion yen ($18 billion), is seen as crucial for the cash-strapped company to plug massive losses at its US nuclear division, Westinghouse Electric.
Last week Toshiba said it has entered into exclusive talks with the public-private Innovation Network Corp. of Japan, state-backed Development Bank of Japan, and US private equity fund Bain Capital, with South Korean chipmaker SK Hynix acting as a lender.
The company was aiming to announce the sale before Wednesday's investor meeting, but said negotiations were still continuing.
"It is taking time to reach a consensus because the consortium comprises multiple parties, and closure was not achieved by Toshiba's primary target date," it said in a statement.
"Toshiba intends to continue the negotiation toward reaching a definitive agreement at the earliest possible date, and will announce this in a timely manner once the agreement is closed."
Toshiba's multi-billion-dollar losses at Westinghouse have raised doubts about the future of one of Japan's best-known companies, which is still recovering from a 2015 accounting scandal.
The firm is now is probing whistleblower claims of financial misconduct by senior managers at the nuclear US unit and trying to gauge the impact on its finances.
Toshiba has repeatedly delayed the release of its long-overdue earnings, saying it needed more time to finish accounting work at Westinghouse.
Toshiba said it has so far found no evidence to warrant criminal charges against Westinghouse executives.
"I apologise from the bottom of my heart to shareholders and other stakeholders," Toshiba chief executive Satoshi Tsunakawa told investors Wednesday.
The chip unit sale is seen as key to Toshiba's turnaround, but it could still face a roadblock as US-based partner Western Digital, which jointly runs a key chip plant in Japan, opposes the sale.
Toshiba's top executive blasted the US firm's bid for a court injunction as "unfair interference".
Tsunakawa also dismissed the possibility of liquidating the more than century-old pillar of corporate Japan, just days after scandal-hit airbag maker Takata filed for bankruptcy protection.
"We will do everything we can to avoid such a situation," he told around 1,000 investors at the meeting.
But shareholders were largely unimpressed.
"Toshiba is is a state of emergency," said one man. "This company needs strong leadership that is capable of making the right business decisions."
Another said: "Toshiba is becoming a third-rate company or worse."
The firm's hard-hit stock was down 0.51 percent at 291.5 yen in morning trading, and it is on a watchlist for possible delisting from Japan's premier exchange.
Hidesato Maekawa, a 78-year-old retired textile factory owner, seemed resigned to be stuck with the stock, which is down some 35 percent since late last year.
"Now that I have held the stock this long, I might was well keep it even if turns into a worthless piece of paper," he told AFP before the meeting.
Toshiba is the world's number-two supplier of memory chips, behind South Korea's Samsung and ahead of third-placed Western Digital.
The sale involving state-backed buyers means the Japanese government will effectively own the chip division.
Tokyo had concerns about losing a sensitive technology amid questions about security around systems already using Toshiba's memory chips, which are also widely used in data centres.
The profitable division has accounted for about one-quarter of Toshiba's total annual revenue.
The company's reputation was already badly damaged over separate revelations that top company executives had pressured underlings to cover up weak results for years after the 2008 global financial meltdown.
Toshiba -- which has more than 180,000 employees globally -- once touted its overseas nuclear business as a future growth driver, filling a hole left after the 2011 Fukushima crisis slammed the brakes on new atomic projects in Japan.
But delays and cost overruns hit Westinghouse's finances hard, as the global outlook for the nuclear business weakened.