The remaining 266 billion yen (US$2.35 billion) will be invested in a fund to be established by Bain Capital with SK Hynix as an LP (limited partner).
SK Hynix disclosed other details about the deal, including how the U.S. -Japan-South Korea consortium will split the stake. If Toshiba Memory is listed and its subscription price rises, SK Hynix will be able to enjoy capital gains, too.
SK Hynix said in a statement it will invest 395 billion yen, part of which will be in convertible bonds that could allow it to take an equity stake of up to 15 percent in the future.
The highly contentious auction process underscores how high the stakes are as rival suitors, the Japanese government and Toshiba's creditor banks all squabble over the world's second biggest producer of NAND memory chips.
While talks relating to consortium member Apple Inc's AAPL.O demands on chip supply have now been settled, the group still has to work out one snag that relates to financing in the event that legal risks materialize, one source with direct knowledge of the deal said. In addition, forming the strategic consortium with multinational corporations may bring SK Hynix an opportunity to cooperate with companies that will lead the fourth industrial revolution. It is noted that even if the deal gets done right away, regulatory reviews often take six months which doesn't leave a whole lot of breathing space before that March window slams shut.
The sale also faces legal challenges from Western Digital WDC.O , Toshiba's chip venture partner and rejected suitor, which is seeking an injunction to block any deal that does not have its consent. It contends that any transfer of Toshiba's memory operations without its consent would violate joint venture agreements. It is forecast that the court will make a ruling in favor of WD.
Toshiba, meanwhile, needs to get a deal moving and soon in order to rectify its financial situation following the embarrassing collapse of its Westinghouse nuclear subsidiary in the US. Then, the following day, against the decision, WD filed a lawsuit to prevent Toshiba from making sole investment in the expansion of Yokkaichi Plant in Mie Prefecture of Japan.