Summary
Seagate Technology Holdings plc (STX) announced a significant event on June 17, 2019, where it received approximately $1.35 billion in cash from Toshiba Memory Holdings Corporation (TMHC). This payment represents the full redemption of Seagate's investment in TMHC's non-convertible preferred stock, which was originally acquired for about $1.27 billion in May 2018 as part of a broader acquisition. This redemption effectively returns Seagate's initial capital plus accrued income, providing a substantial cash inflow. Furthermore, the company confirmed the finalization of its capital reduction and creation of distributable reserves, following shareholder approval on April 25, 2019, and subsequent confirmation by the Irish High Court on May 30, 2019. This corporate action is now legally effective. Importantly, Seagate's existing product supply agreement for NAND flash memory with Toshiba Memory Corporation remains unaffected by the stock redemption.
Key Highlights
- 1Seagate received $1.35 billion cash from Toshiba Memory Holdings Corporation (TMHC).
- 2The cash received is for the redemption of Seagate's non-convertible preferred stock in TMHC.
- 3This redemption covers the original principal investment of approximately $1.27 billion and accrued payment-in-kind income.
- 4The company's investment in TMHC's preferred stock was acquired in May 2018.
- 5Seagate's product supply agreement for NAND flash memory with Toshiba Memory Corporation remains in effect.
- 6The reduction of the company's capital and creation of distributable reserves was confirmed by the Irish High Court on May 30, 2019.