Toshiba skyrockets over 22% on chip unit sale hopes

Toshiba's shares skyrocketed over 22 percent Wednesday on hopes it will unload a stake in its prized chip business to shore up a battered balance sheet.

The rebound follows a more than 20 percent slide in the Tokyo-listed stock last week as one of Japan's best-known firms warned over huge losses and a probe into the accounting at US nuclear arm Westinghouse Electric.

On Wednesday, the shares jumped 22.31 percent to end the day at 224.7 yen ($2), as Japan's Nikkei business daily said that Toshiba has asked potential bidders to peg its chip division's value at two trillion yen ($17.6 billion) or more.

The firm on Tuesday said it has completed the 31.4 billion yen sale of its medical finance unit to copier and camera maker Canon.

But with concerns mounting over Toshiba's precarious financial situation, the stock rally was not likely to last, said Toshikazu Horiuchi, a broker at IwaiCosmo Securities.

"Today's move is likely to be an exception -- the volatility will continue for the time being," he added.

Toshiba shares are down by about half since late December, when it first warned of big losses at Westinghouse.

A chip division sale is seen as crucial for Toshiba -- which declined comment on the Nikkei report -- to raise cash as it struggles with multi-billion-dollar losses.

Last week, Toshiba issued a grim preliminary forecast of a net loss of 390 billion yen in the fiscal year to March, dragged by a writedown topping $6 billion at Westinghouse.

Toshiba also said it opened probe into possible wrongdoing by the unit's senior executives while chairman Shigenori Shiga, who once headed Westinghouse, quit his post.

Less than two years ago, Toshiba suffered an embarrassing profit-padding scandal that involved bosses pressuring subordinates to cover up weak earnings.

source: AFP