Western Digital Corp. appears closer to spinning off its flash business after disclosing new details about financing and its strategic review.

Earlier this week, the firm detailed a $900 million sale of convertible preferred stock to investors including Apollo Global Management Inc. and Elliott Investment Management. The disclosure provides investors greater insight into a potential transaction after Bloomberg reported that the spun-off unit may merge with Kioxia Holdings Corp. to create a publicly traded company in the US.

Selling preferred shares enabled the company to secure an influx of cash without an immediate shakeup to its financial profile, said Jim Osman, founder of The Edge Consulting Group. “Raising capital through the preferred stock route would not only provide liquidity but also ensure that there is no immediate dilution to ownership, nor is the company highly levered by raising capital in the form of additional debt,” he said in an interview. “However, deal talks are still in the early stage, and they must overcome regulatory hurdles to complete the merger.”

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