Toshiba Corp CEO Satoshi Tsunakawa said that his company is open to talks with Western Digital in their dispute over the sale of the Japanese conglomerate's chip unit.

Speaking at the company headquarters during a news conference after asking regulators for extension on financial filing and deal on chip unit sale, Mr. Tsunakawa said that WD "used to be a good partner, so we want to continue talks. I'm disappointed with the current dispute." He addd it was important that they joined forces to better compete against bigger rival Samsung Electronics. But Toshiba;s CEO added that his company would not be the first to propose WD join the consortium and it was still considering whether to block Western Digital employees not based at the plant from accessing joint venture data servers.

Western Digital, which jointly runs Toshiba's main semiconductor plant, has sought a U.S. court injunction to prevent any deal for Toshiba's chip unit that does not have its consent.

Toshiba softened its stance against Western Digital on a day of further indignities as the crisis-wracked conglomerate saw itself demoted to the second section of the Tokyo Stock Exchange and estimated bigger losses for the past financial year.

Earlier this week, Toshiba chose a consortium of Bain Capital, Sk Hynix and Japanese government investors as preferred bidder for its memory chip unit, the world's No. 2 producer of NAND flash chips. It wants to close a deal, worth some $18 billion, by June 28, the day of its shareholders meeting.

But according to unconfirmed reports from Japan, the Bain consortium members had made resolving the dispute with Western Digital a condition of their investment.

The participation of South Korea's SK Hynix Inc. in the Bain consortium has raised concerns that the winning bid may find it difficult to clear anti-trust reviews. Its presence has made Western Digital reluctant to join the group in its current form due to worries that high-level technology for NAND chips could be leaked to its rival.

But Mr. Tsunakawa said SK Hynix would not be holding any equity and would not be involved in management.