Toshiba board agrees to sell memory business to Bain-led group

Wednesday, the board of reeling technology giant Toshiba announced that it has approved the $18 billion sale of the company’s flash memory operation, Toshiba Memory Corporation (TMC), to a group of buyers that includes American venture capital firm Bain Capital, and a pair of government-owned Japanese organizations, the Innovation Network Corporation of Japan, the New York Times reports.

The Financial Times says the Japanese government’s involvement in the deal evinces the integrality of Toshiba’s success to the Japanese economy.

Toshiba is fighting to stay afloat after its nuclear power subsidiary, Westinghouse Electric Company, lost money on a number of ill-fated American nuclear projects. Westinghouse, which Toshiba acquired for $5.4 billion in Spring 2006, filed for bankruptcy protection in March.

Toshiba has entered survival mode, draining its cash reserves to remain operational. With the sale of TMC, the company is seeking to generate a short-term cash infusion that will facilitate a recovery.

According to the New York Times, Toshiba was in danger in March of being barred from the Tokyo Stock Exchange unless the company generated new capital.

Though Toshiba just created TMC in April, the company has been a major player in the flash memory sector since the inception of the technology.

A Toshiba engineer invented flash memory in 1980, and the company introduced the technology to the world in 1987. Since, Toshiba’s memory business has provided an integral revenue stream. Today, the company is the world’s second-largest producer of microchips, by volume, second only to South Korean competitor Samsung.

Flash memory is solid-state, meaning it stores data electronically rather than mechanically. Unlike RAM, another solid-state storage system, flash memory does not require power to preserve data, making it ideal for use in portable devices like digital cameras, video game consoles, smartphones, etc.

Even after the sale, Toshiba will likely maintain a significant amount of control over the business, though the buyers will take the lion’s share of the profits.

Toshiba has indicated plans to partner with Bain to create the special purpose company that will purchase TMC.

The new company—which Bain has dubbed Pangea, according to the Financial Timeshas received financial support from Apple, Dell, and others.

Analysts expect Toshiba to hold a minority stake in the new company, and to have considerable decision-making power.

The shareholder structure, the New York Times says, could allow Toshiba to maintain control of the new company’s operations. Buyers will get “a mix of regular shares, preferred shares — which normally do not carry voting rights — and bonds that could eventually be converted into shares.”

The sale awaits antitrust review and has attracted legal opposition from Western Digital, an American company that co-runs a joint microchip-production operation with Toshiba in Japan.

Western Digital claims that the partnership gives it a vested interest in Toshiba’s memory business and that Toshiba is not authorized to sell TMC without Western Digital’s approval. The American firm has initiated legal action to block the sale. The International Court of Arbitration is now reviewing the case.

Western Digital issued a statement Wednesday calling Toshiba’s pursuit of the selloff “troubling” and expressing confidence that the court would side with Western Digital.

Because the sale has yet to be finalized, the door remains open for Toshiba to negotiate with and field offers from other buyers.

A bidding war has been ongoing for the past several months.

Earlier this month, Taiwanese tech behemoth Foxconn, with the support of Apple, venture capital firm SoftBank and others, made a bid to buy TMC. The New York Times’ source says Foxconn offered a healthy sum, but that Japanese authorities feared selling to Foxconn would compromise the country’s leadership in the global technology market.

Western Digital been among TMC’s suitors.

Toshiba stock has dropped about 50 percent since April 2013. As of Thursday afternoon, shares are down 2.9 percent on the news.

Featured image via Wikimedia Commons

Asian Ride-Hailing Company Grab Has Raised 2 Billion and Counting in Latest Investment Round

China’s most prominent ride sharing company, Didi Chuxing, and SoftBank, a leader in the Japanese telecommunications and internet services industries, have invested a combined $2 billion in southeast Asian ride-hailing company Grab, Johana Bhuyan of reports. Grab expects to collect an additional $500 million dollars during this round of funding. It will use the money to expand geographically, as well as to bolster GrabPay, its mobile pay service.

Grab, founded in Singapore in 2012 as “MyTeksi,” now operates in 65 cities across 7 countries in Southeast Asia. The company serves three million daily users, Bhuyan says, and claims to hold 95% of the taxi market and 71% of the ride hailing market in the region.

Didi initially invested in Grab in 2015, during the latter company’s $350 million Series E round. SoftBank led Grab’s $250 million series D round in 2014.

Didi owns Uber’s China operation, and holds stake in Lyft, as well as in India’s largest ride-hailing company, Ola, and Brazil’s leading ride-hailing company, 99. SoftBank invested $100 million in 99 back in May, and a $210 million in Ola in 2015.

Rather than compete with one another across foreign markets, many ride-hailing companies are  choosing to cooperate, sharing their driver networks with each other. As a result of the Lyft-Didi alliance, for instance, a Lyft user traveling in China will find Didi cars listed when he opens his Lyft app, and vise versa. When it closed a $5.5 billion funding round in April, Didi said it planned to use the money to create a “sustainable global mobility ecosystem.” The investment in Grab marks another step toward doing just that.

Uber took a different approach toward establishing itself in international markets: it went head to head with established local companies like Didi in China. Its attempt to break into the Chinese market cost Uber about $2 billion, Kara Swisher of recode wrote last August. In the end, the companies called a truce: Didi gained control of Uber’s Chinese assets, adding $7 billion to its valuation, but Uber was granted a 20% stake the expanded Didi company, which] invested $1 billion in Uber.

SoftBank is also making inroads into self-driving technology. Just last week, it co-led a $159 million investment round in Nauto, which develops technology in driverless cars.

According to Arjun Kharpal of CNBC, Nauto plans to “use the money to grow and develop its camera technology and install it into more cars globally.”

Self-driving technology may be intertwined with the ride-hailing industry for the foreseeable future. Last week, Lyft announced intentions to add driverless cars to its network by the end of this year. Last September, Grab partnered with NuTonomy, a Cambridge based MIT spinoff that specializes in autonomous car technology, to allow users to try driverless cars for free. Uber’s Advanced Technologies Center in Pittsburgh, founded in 2015, employs some of the industry’s top minds in the effort toward self-driving technology. Lyft will create a similar operation, it said in the aforementioned announcement.

Cooperation is doing much to spur the ride-hailing as well as the autonomous car industry. GM and BMW also participated in Nutonomy’s investment round last week, and such automakers will likely team with ride hailing companies, which can provide platforms for the honing of autonomous technology.

The expansive alliance network that includes Didi, Left, Grab, and others is making it easier for customers to find rides around the world. Of course, the easier that becomes, the more ride hailing will pull ahead in the transportation space.

But Uber, having lost billions in a more or less futile attempt to infiltrate the Chinese market, may be left behind, unless that company can outstrip competitors in the race toward autonomous technology.

Featured image via Flickr/Jon Russell

AirAsia X to Operate in America

Malaysian-based AirAsia X announced on Tuesday that the Federal Aviation Administration had granted it certification to fly into the U.S.  The Asian low-cost carrier is the first of its kind to receive authorization to operate scheduled passenger, according to the airline.

AirAsia X Group CEO Datuk Kamarudin Meranun said in a statement, “This is a major milestone for AirAsia X. Our expansion up until now has concentrated on Asia, Australia, and the Middle East, and we are excited about our first foray into an entirely new market as we look beyond Asia Pacific.”

AirAsia X, the sister airline to low-cost giant AirAsia, delivers affordable long-haul international flights with its fleet comprised of Airbus A330 aircraft.

The airline stated, “AirAsia X is currently considering flights to several US states including Hawaii as part of its route expansion plans,” but has not yet revealed when it will arrive in the country, or in which order it will enter the markets.

The CAPA Center for Aviation predicts that the airline’s first routes to the US will be from its base in Japan to Hawaii, Los Angeles, Las Vegas, or San Francisco. The CAPA also posits the possibility of an ultra-long-haul route from Malaysia.

AirAsia X’s announcement comes a day after Emirates Airline announced its own U.S. route. Emirates, the world’s largest long-haul carrier, plans to pass a daily flight route between New York City and Athens. Emirates president Sir Tim Clark said in a statement, “We are pleased to be able to help meet a strong consumer need long neglected by other airlines, and we would like to thank the authorities and our partners in both the US and Greece for their support of the new route.”

AirAsia X joins Norwegian Air and Iceland’s WOW Air in a wave of low-cost, long airlines to arrival in the US market.

Indonesian Poultry Prices on Rise and How it Affects You

Poultry prices continue to be on the rise possibly hurting corporation who rely heavily on their supply.

Indonesia’s government efforts to gain a larger self-sufficiency in food production has put a policy in place that has restricted the amount of corn imports, which has already affected rice and bean prices.

This policy is expected to also increase the price of poultry coming from Indonesia.

From just a year ago, home-grown chicken is up by 6 percent costing $5 per kg says the Trade Ministry data.

Food prices in general have also increased 6 percent in a years span.

Ducks amongst other poultry
Ducks amongst other poultry (Photo credit: Wikipedia)

Indonesian President Joko Widodo has been pushing for self-sufficiency since the beginning of his power in October. Many restrictions on imports have been made and possibly caused the closures of sugar refineries and higher prices in food.

Secretary general of Indonesian Feedmills Association (GPMT), Desianto Budi Utomo told Reuters that Southeast Asia’s biggest economy is only projected to import 3 million tonnes as compared to the 3.1 million tonnes last year.

Utomo says, “We should be importing 3.5 million but, considering the policy of the government, we are not supposed to import more than last year. There is a big push from the government not to import like last year. Local corn (prices) will increase. The price for feed mills will increase.”

With the increase of wealth in Indonesia there has been more of a demand for poultry and corn.

Indonesia receives their imports from Brazil and Argentina. In order to do so there is a 5 percent import tariff is imposed as well as an importers application to receive a government permit.

The poultry sector has made a hefty investment being worth more than $4 billion a year and is even projected to grow with the Muslim population’s demand for meat increases.

English: Cobs of corn
English: Cobs of corn (Photo credit: Wikipedia)

In Indonesia the 82 feed mills are at a 75-80 percent capacity according to Utomo. Right now holding 21.5 million tonnes a year and increasing by 2.5 million tonnes this year.

The government is hoping that a higher output of corn will make up for the lower imports.

The Agriculture Ministry projects a rise of 6 percent in corn production for this year to 20.33 million tonnes.

Yet, the U.S. Department of Agriculture estimates something different in the Indonesian corn production for the 2014/15 year.They see 9.4 million tonnes an increase of last years 9.1 million tonnes. GPMT also agrees with their findings.

To better production, they are building more dams, modernising irrigation systems, increasing planting areas for staple foods and providing easier access to credit for smaller farmers.

The demand for food is increasing to Ramadan in June which can cause many more to disfavor Widodo’s policies.

Still the policy will not undergo any changes according to the head of the centre for trade policy harmonisation at the Trade Ministry, Djatmiko Bris Witjaksono.

“This government has put food security top, as a national issue. We want to increase self-sufficiency. The public has the same line of thinking, and industry also,” says Witjaksono.

An increase in poultry prices are surfacing worldwide and causing many problems for this in demand for the meat.

Toyota Announces First Hydrogen Fuel Car

Toyota aims to give all-electric car manufacturer Tesla a run for its money with the all-new, hydrogen cell powered FCV. Toyota claims that the FCV has a range of around 435 miles; that’s a figure that easily bests Tesla’s offering on any trim level of Tesla’s flagship vehicle, the Model S.

Another plus for Toyota is their claim that the FCV will emit only water vapor. On top of that, estimated refueling time is only three minutes. So the Toyota has the Model S beat in both recharge time and range. Right off the bat, this comparison seems like no comparison whatsoever. Still, there are more layers to this story.

Andre Agassi once said, “Image is everything.” If that statement holds any weight for you, then any Tesla would be your choice, hands down. Every curve, edge and dip in any Tesla screams money, and the interiors are just as luxurious. The Tesla can add 170 miles to your trip in just 30 minutes of charging time via what they call a supercharger, but here’s the bigger kicker; there are already 98 charge stations strategically spread across the East and West Coast. According to the Tesla’s website, they expect to cover 80% of the US and Canadian population (in terms of range) with superchargers by the end of this year, and 98% of those same populations before the end of 2015.

Oh, performance? The Model S offers three trim levels, and no alternative-fuel vehicle comes close. The 60, 85 and P85 models come with, 302, 362 and 416 horsepower, respectively. If the 60 version will raise eyebrows, the P85 version may snap necks. Their zero-to-60 times are 5.9 seconds and 4.2 seconds, respectively. Any trim level puts you behind the wheel of a bona fide electric hot-rodder. The Model S 60 comes in at around $69K, almost exactly matching the expected price of the FCV (for now). The 80 is $75K and the quickest of the three, the P85, comes in at $87K.

Toyota may have a winner on their hands, but Tesla has proven that they have a firm grip on their expanding customer base, and their plan to dot the map with supercharging stations worldwide (Europe has 23, Asia has three) is working. How they’re able to blend fuel economy, luxury materials and class-leading performance at a price range right at or only slightly above the FCV’s is a mystery that can only be solved with the simplest of explanations; practice makes perfect.

via Toyota
via Toyota