Toshiba said yesterday it will hold exclusive talks with a consortium of U.S., South Korean and state-backed Japanese investors to sell its prized memory chip business, as the loss-hit conglomerate scrambles to raise cash. The company needs money after taking massive losses in its US nuclear operations that have put the survival of a pillar of corporate Japan in doubt. Toshiba's board yesterday decided to select the consortium as a "preferred bidder," it said in a statement, suggesting the deal is all but imminent. The group's joint bid, which is reportedly worth more than 2 trillion yen ($18 billion), is "the best proposal, not only in terms of valuation, but also in respect to certainty of closing, retention of employees, and maintenance of sensitive technology within Japan," Toshiba added. The bidding group is comprised of the public-private Innovation Network Corp. of Japan, the state-backed Development Bank of Japan, and U.S. private equity fund Bain Capital, it said. South Korean chip giant SK Hynix will participate as a lender in the deal, a Toshiba spokesman told AFP. Toshiba is aiming to finalize a sale by its June 28 shareholders' meeting, and close any agreement by March next year, "upon clearance of all the required processes, including competition law approvals in key jurisdictions," it said.

The sale of the memory chip business, seen as key for cash-strapped Toshiba's turnaround, still faces hurdles as US chip factory partner Western Digital tries to block the sale with a court injunction. Toshiba "has no right to transfer its JV (joint venture) interest to a third party without" consent of Western Digital's subsidiary SanDisk, it said in a statement after the Japanese firm's announcement. Toshiba is the world's number two supplier of memory chips, behind South Korea's Samsung and ahead of third-placed Western Digital. Its chip division has accounted for about one-quarter of its annual revenue. The chips are widely used in data centers as well as smartphones and computers.