Japan chipmaker Kioxia to file preliminary listing application, sources say

FILE PHOTO: Japanese chipmaker Kioxia's products are displayed at its headquarters in Tokyo, Japan, September 30, 2021. REUTERS/Kim Kyung-Hoon/File Photo

By Miho Uranaka and Sam Nussey

TOKYO (Reuters) -Bain Capital-backed chipmaker Kioxia plans to submit a preliminary application to list shares on the Tokyo Stock Exchange in the coming days, two people familiar with the matter said.

The chipmaker plans to submit a full application in August and list at the end of October, though the timing could be pushed back to December, said the people.

Kioxia said it has no update on its initial public offering (IPO) plans and declined to comment on its listing procedures.

Bain, which led a consortium that acquired the memory unit of Toshiba in 2018, aims to recover capital by selling shares, with Kioxia planning to raise capital by issuing new shares, the people said.

Mitsubishi UFJ Morgan Stanley Securities (MUMSS) and Nomura Securities are advising on the listing, the people said.

Bain, MUMSS and Nomura declined to comment.

Kioxia hopes to capitalise on improving market conditions, the people said.

It postponed an IPO plan in 2020 amid uncertainty in the global chip market due to trade tensions between the U.S. and China.

At that time, Kioxia targeted a market capitalisation of over 2 trillion yen ($12.68 billion), later reduced to 1.7 trillion yen.

Kioxia's operating loss widened to 253 billion yen in the year ended March even as the chipmaker reported its first profitable quarter in six quarters due to higher chip prices.

Average selling prices rose by around 20% on a U.S. dollar basis in the January-March quarter, Kioxia said in May.

Investment in servers for artificial intelligence tasks and replenishment of inventory by smartphone and PC customers are boosting prices, said researcher TrendForce.

Kioxia was in merger talks with Western Digital last year but they stalled due to opposition from Kioxia investor SK Hynix, Reuters has reported, though many in the industry still see consolidation as needed.

Kioxia said last week it had refinanced loans worth some 540 billion yen and secured an additional 210 billion yen loan facility.

($1 = 157.7700 yen)

(Reporting by Miho Uranaka and Sam Nussey; Editing by Christopher Cushing)