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Toshiba considering $5.3 billion capital injection - source

Reuters  |  TOKYO 

By Taro Fuse

TOKYO (Reuters) - Corp, desperate for to avoid a possible delisting, is considering raising about 600 billion yen ($5.3 billion) by offering new in a third-party allotment, a person briefed on the matter said on Friday.

The Japanese conglomerate has received proposals from several domestic and overseas brokerages for plans to raise money through a public offering or third-party allotment, and is looking into the option of allocating mainly to overseas investors, the person said.

In early trade, of fell as much as 8 percent on the capital injection plan, first reported by public broadcaster NHK. They were down 4.5 percent by mid-morning, underperforming the benchmark Nikkei average's 1 percent fall.

Strapped with liabilities arising from its bankrupt U.S. nuclear unit, agreed in September to sell its prized chip unit, Memory, to a group led by Bain Capital for $18 billion. It needs to beef up its balance sheet by the end of the fiscal year in end-March to avoid a possible delisting.

The source told that wants to finalise the capital injection plan by year-end because it would need shareholder approval depending on the offering price and scope of share dilution. The person declined to be identified because the plan is not public.

In a statement, repeated its stance that it was aiming to close the deal to sell its chip business by the end of March, saying in response to the NHK report that nothing specific had been decided regarding any funding plans.

Announcing half-year results a day earlier, Chief Financial Officer Masayoshi Hirata said had launched a working group to consider various options to raise capital in case the deal did not close in time. He offered no specifics.

reported robust second-quarter results with a 76 percent jump in operating profit driven almost entirely by a strong performance from its memory chip unit.

If fails to close the sale in time, that could keep in negative net worth for a second year in a row, putting pressure on the Tokyo Stock Exchange to delist it.

($1 = 113.3700 yen)

(Reporting by Taro Fuse; Writing by Chang-Ran Kim; Editing by Stephen Coates)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Fri, November 10 2017. 10:00 IST
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