By Kosaku Narioka
TOKYO -- Apple Inc., Dell Technologies Inc. and two other U.S. technology companies are set to give up their preferred shares in Japanese chip maker Toshiba Memory Holdings Corp. for more than $4 billion under a refinancing plan, according to people familiar with the plan.
The U.S. companies, which are customers for Toshiba Memory's semiconductors, helped a Bain Capital-led consortium take over the chip maker from former parent Toshiba Corp. in June, preventing Western Digital Corp. from taking control of its memory joint venture with Toshiba. A takeover by Western Digital might have further consolidated a market in which Samsung Electronics Co. has already established a dominant presence.
A package of Yen1.3 trillion ($11.8 billion) in financing to be in place soon from Japanese banks would enable Toshiba Memory to buy out the preferred shares from the four American companies, according to the people. A simplified capital structure would also make it easier for Toshiba Memory to list itself, one of the people said. The listing would allow the capital-intensive chip business to access funds from the public-equity market.
Apple, Dell, Kingston Technology Co. and Seagate Technology PLC are set to sell their preferred shares back to Toshiba Memory for about Yen500 billion yen ($4.5 billion) by the end of May, according to the people familiar with the plan. Together those companies made a few hundred million dollars on their investments, one of the people said. Apple and Kingston declined to comment. Dell and Seagate didn't respond to requests for comment.
Toshiba Memory aims for a listing in Tokyo near the end of the year or at the beginning of next year, according to one person involved with the planning, with the timing dependent on market conditions for semiconductors and public equities. Some bankers have said the listing would take place this year.
A recent slump in chip prices means now wouldn't be the best timing for a listing, the person said.
Under the refinancing plan, three major Japanese banks would lend Yen1 trillion, and the government-owned Development Bank of Japan Inc. would invest in preferred shares worth Yen300 billion, replacing existing bank loans and the preferred shares owned by the four American companies, according to the people familiar with the plan.
The refinancing doesn't change the ratio of voting rights: 49.9% for Bain Capital; 40.2% for Toshiba; and the remaining 9.9% for Japanese optical product maker Hoya Corp.
Write to Kosaku Narioka at email@example.com