Toshiba considering measures in case chip unit sale not completed by March

By Makiko Yamazaki

CHIBA CITY, Japan (Reuters) - Japan's embattled Toshiba Corp said on Tuesday it is considering various measures in case it cannot complete the $18 billion sale of its prized flash memory chip unit by the end of March.

The sale needs to close by the end of the financial year in March or Toshiba will likely report negative net worth - where liabilities exceed assets - for a second year running - which may trigger an automatic delisting from the Tokyo Stock Exchange.

"We must think about various measures in accordance with changes in circumstances," Toshiba CEO Satoshi Tsunakawa said at an extraordinary general meeting where shareholders approved the sale of unit a consortium led by Bain Capital LP.

"Nothing has been decided, but it's true that we are considering potential measures," he added, but did not elaborate on what those measures might be.

Proceeds from the sale are crucial to cover billions of dollars in liabilities arising from the conglomerate's now bankrupt U.S. nuclear unit Westinghouse.

But a deal was only agreed last month after a long and contentious auction, and chances are high that it will not receive regulatory approvals by end-March as such reviews usually take at least six months.

Toshiba is also facing legal challenges from its chip joint venture partner Western Digital, which opposes any deal without its consent and has sought an injunction with the International Court of Arbitration.

Some analysts say Toshiba may move to raise fresh capital now that the Tokyo Stock Exchange has removed it from a special watchlist, which had prevented it from issuing new shares.

At the meeting, shareholders also approved its earnings report for the past business year and the appointment of 10 executives to the board, including Tsunakawa and seven other incumbent board members.

(Reporting by Makiko Yamazaki; Editing by Edwina Gibbs)