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Toshiba in Turmoil

Toshiba Memory considers 2019 Tokyo listing

Bain-backed chipmaker aims to finance capital spending

 Toshiba Memory hopes that going public will make it possible to implement a more flexible financial strategy.

TOKYO -- Toshiba Memory is considering listing its shares on the Tokyo Stock Exchange, with plans to go public as early as 2019, in an effort to finance its massive capital spending.

The company is in the process of choosing principal underwriters, with at least five to six brokerages in Japan and overseas expected to be chosen.

The timing of listing will be problematical, as the price of flash memories has been declining since the start of the year. The commercial production of Chinese makers, among other factors, is expected to increase the supply of flash memories, likely to put downward pressure on prices.

In June, the company went under the umbrella of the Japan-U.S.-South Korea alliance led by U.S. private equity firm Bain Capital.

Toshiba Memory is the world’s second-largest flash memory maker, trailing only Samsung Electronics. The company had announced it would aim for the IPO in three years’ time. In the wake of tougher competition among chipmakers, however, the company hopes that going public will make it possible to implement a more flexible financial strategy, and secure capital spending more actively.

Toshiba Memory is adding new facilities at its Kitakami plant in Iwate Prefecture, in northeastern Japan, which is scheduled to begin operation in 2020. The company also plans additional capital investment.

Amid growing concern over the global economic slowdown due to U.S.-China trade war, the company will have to determine the best suitable time for listing.

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