Japanese electronics maker Toshiba has raised about 360 billion yen in cash by selling part of its stake in NAND flash memory maker Kioxia Holdings after the company's share price climbed.
Japan's Nikkei reported on the 14th that Toshiba's holding in Kioxia fell to 12.84% from 14.06% as of the 7th, citing an amended report the company filed with the Kanto Local Finance Bureau. The 1.22 percentage point stake that Toshiba sold is worth about 360 billion yen (about 3.3 trillion won).
Toshiba had filed an earlier report on the 10th of last month showing its Kioxia holding had declined to 14.06% from 15.1%. That change shifted Kioxia's largest shareholder from Toshiba to BCPE Pangea Cayman 2, a special purpose company set up by Bain Capital. SK hynix holds convertible bonds issued by the SPC. Because converting those bonds into shares would give SK hynix voting rights in the SPC, Toshiba's stake sale effectively makes SK hynix Kioxia's largest shareholder in substance, even though the SPC remains the registered top shareholder.
Toshiba has continued selling down its Kioxia stake to fund investment in its core business. Kioxia was spun off from Toshiba's memory division. The parent company was undone by its $5.4 billion acquisition of U.S. nuclear power firm Westinghouse in 2006. Hit by a series of setbacks including the Fukushima nuclear accident, Westinghouse inflicted losses of more than 700 billion yen on Toshiba. Facing a cash crunch, Toshiba sold off its most valuable assets, including semiconductor affiliate Kioxia and its medical device business, before being acquired by Japan Industrial Partners in 2023 and delisted.
Toshiba has since sold Kioxia shares seven times between July 15 and the 3rd of last month. Its non-operating profit for the April-June quarter surged to 6.35 trillion yen (55.85 trillion won) from 153.3 billion yen (1.35 trillion won) a year earlier. Valuation gains tied to Kioxia Holdings accounted for the overwhelming majority of that figure at 6.33 trillion yen (55.66 trillion won). Toshiba is pursuing a relisting in fiscal 2028.
Bain Capital, the U.S. investment fund, is also selling Kioxia shares, according to Nikkei. Kioxia's stock gained momentum from April and hit a record high of 112,700 yen in late June. It has since reversed course, closing at 50,590 yen on the 14th of this month. Kioxia is considering raising at least $10 billion (about 13.3 trillion won) by issuing American depositary receipts on the U.S. market, Bloomberg reported.
