By Takashi Mochizuki
TOKYO—Toshiba Corp. said Monday it has yet to win approval from Chinese authorities for the $19 billion sale of its chip unit, increasing the likelihood it will miss its deadline to close the deal this week.
Toshiba’s /zigman2/quotes/205628942/delayed JP:6502 -1.07% contract with the buyers — a consortium led by U.S. private-equity firm Bain Capital that includes funding from Apple Inc. /zigman2/quotes/202934861/composite AAPL -2.26% — allows the Japanese conglomerate to cancel the deal if it isn’t completed by March 31.
Some analysts and investors have said Toshiba should consider exercising the option to cancel because the company’s financial stress has eased after it raised nearly $6 billion in a new share issue last year. By keeping the chip business, Toshiba could reap the benefits of strong demand for flash-memory semiconductors, although it would also be exposed to risks from the volatile market.
People familiar with Toshiba’s thinking said it would need to consider the option after April 1, but said the company still hopes to complete the deal as planned. The chip business requires frequent multibillion-dollar investments to maintain a technological edge, and that could be a challenge for Toshiba with its still-unsteady finances.
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