Toshiba has approved plans to make its core Memory Chip Business a separate company and seek outside investment for it.

The company is desperately trying to avoid being crippled by an upcoming multi-billion-dollar write-down for its US nuclear Business.

The proceeds are set to cover part of the charge for cost overruns at a newly acquired US power plant construction business which is thought to be about $6 billion.

Toshiba’s memory Chip Business is its crown jewel, accounting for the bulk of its operating profit.

Toshiba is looking to sell roughly 20 percent and potential investors include private equity firms, business partner Western Digital Corp and the government-backed Development Bank of Japan, sources have said.

It wants to complete the sale by the end of the financial year in March to stop shareholder equity from being wiped out by the charge.

However, the move is seen as a band-aid for the sick company as the NAND business is the only one with value, as it makes up all of the semi-conductor profits, which comprise 75 percent of the overall company’s profit.

Even if the deal pans out Tosh will probably have to sell more bits of the company in the future.

A raft of private equity funds, including Silver Lake and Permira, have signed non-disclosure agreements with Toshiba, sources said.

Western Digital, which operates a NAND plant in Japan with Toshiba, may seem like a natural buyer of a large stake in the chip business, a sale might be difficult to pull off before March as it would attract a lot of snuffling from anti-trust watchdogs.

Toshiba estimates the value of its memory chip business at $9-13 billion.

Toshiba Chief Executive Satoshi Tsunakawa recently told the company’s main creditors of its plans and that Tosh will flog off other businesses.

Japanese business weekly Toyo Keizai reported that Terry Gou, chief executive of Foxconn, the world’s largest contract electronics maker, is interested in either taking a stake in or buying some of Toshiba’s businesses.