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Law360 (September 28, 2020, 5:43 PM EDT) -- Japanese semiconductor maker Kioxia on Monday called off its plans for a roughly 334.3 billion yen ($3.2 billion) initial public offering on the Tokyo Stock Exchange, citing the coronavirus pandemic and market volatility.
Private equity-backed Kioxia Holdings Corp. said in an announcement that it is postponing the debut, and the Tokyo Stock Exchange said it has been delisted as a result. Kioxia, which was formerly known as Toshiba Memory Holdings Co., left the door open to a future listing.
"Kioxia will continue to evaluate the appropriate timing for its offering," the announcement said.
Kioxia President and CEO Nobuo Hayasaka said that market conditions and COVID-19 were stalling those plans.
"While we received significant interest from many investors, the lead underwriters and Kioxia do not believe it is in the best interest of current or prospective shareholders to proceed with the IPO at this time of continued market volatility and ongoing concerns about a second wave of the pandemic," Hayasaka said in a statement.
The move also comes amid escalating trade tensions between the U.S. and China. Kioxia sells flash memory chips to Chinese technology giant Huawei, which has been the subject of numerous actions from U.S. federal agencies seeking to curb its market power.
The Trump administration in August announced a new round of export restrictions that would require companies whose chips are sold to Huawei to secure export licenses for U.S. software and tools that would ultimately be used in Huawei-designed chips.
And federal contractors face a so-called Huawei ban that prevents them from securing federal contracts if they use certain telecommunications equipment made by Huawei or several other Chinese companies.
Kioxia is a spinoff from Toshiba Corp., which in 2018 sold the business for about 2.3 trillion yen to a buyer group led by private equity firm Bain Capital. Toshiba still retains a roughly 40% stake in Kioxia, but it told investors in June that it was planning to divest its stake and return most of the proceeds to shareholders.
Representatives for Kioxia did not immediately respond to a request for comment Monday.
--Additional reporting by Alex Lawson, Benjamin Horney and Daniel Wilson. Editing by Daniel King.
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