Western Digital Seeks Arbitration on Toshiba Chips Unit Sale
Western Digital is seeking arbitration in a dispute with its joint venture partner Toshiba Corp. over the sale of the Japanese electronics giant's computer-chip business.
Toshiba wants to sell the lucrative chips unit to shore up its finances, but Western Digital is demanding Toshiba first obtain its consent.
Tokyo-based Toshiba forecast Monday a 950 billion yen ($8.4 billion) loss for the fiscal year that ended in March. That report was issued without the endorsement of Toshiba's auditors.
Western Digital said in a statement that several of its SanDisk subsidiaries have filed a request for arbitration with the ICC International Court of Arbitration over plans to sell its NAND flash-memory joint ventures with Toshiba. The request seeks to block the sale, arguing it would be violation of their joint venture agreement. The arbitration will take place in San Francisco, it said.
"Seeking relief through mandatory arbitration was not our first choice in trying to resolve this matter. However, all of our other efforts to achieve a resolution to date have been unsuccessful, and so we believe legal action is now a necessary next step," said Western Digital Chief Executive Steve Milligan.
Toshiba President, Satoshi Tsunakawa, who has acknowledged that the company's strategy based on Westinghouse was a mistake, said he doesn't think Western Digital can block Toshiba.
"With regards to your first question as to whether this may delay bidding procedures, we will try to dispel such concerns by explaining to all potential bidders the validity of Toshiba's position," he told reporters.
Toshiba described the financial results it released Monday as "projections," rather than results. The dismal figures were in line with earlier estimates.
Toshiba's U.S. nuclear business Westinghouse has filed for bankruptcy protection. Its losses, and a years' long accounting scandal are imperiling the company's future. Toshiba's earnings reports, meanwhile, have been delayed by questions over its acquisition of U.S. nuclear construction company CB&I Stone and Webster.
Toshiba said it expects to post a profit of 50 billion yen ($442 million) for the fiscal year through March 2018.
Costs in the nuclear industry have ballooned since the March 2011 tsunami in northeastern Japan, when three reactors at the Fukushima Dai-ichi nuclear plant sank into meltdowns, and stricter safeguards are required to operate and build reactors.
© 2017 Associated Press under contract with NewsEdge/Acquire Media. All rights reserved.