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UPDATE 1-Toshiba to raise $5.3 bln from new shares to avoid delisting risk

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TOKYO, Nov 19 (Reuters) - Toshiba Corp said it would raise 600 billion yen ($5.3 billion) from a sale of new shares, a key step that would allow the troubled conglomerate to remain a publicly traded company even if the sale of its chip unit is delayed.

Toshiba's board met on Sunday and approved a plan to raise 600 billion yen by offering new shares to 60 overseas investors who have signed up to the deal, the company said.

Toshiba needs to raise 750 billion yen by the end of March to plug a balance sheet hole left by its bankrupt U.S. nuclear power business, or it will be delisted from the Tokyo Stock Exchange.

The company said it would use proceeds from the share sale to pay off liabilities related to the bankrupt unit and book losses that will allow tax write-offs sufficient to boost its assets back above liabilities.

The share sale, together with the tax write-offs, will boost its balance sheet by at least 840 billion yen in total, the company said.

Toshiba will issue the new shares at 262.8 yen per share, a discount to Friday's closing price of 292 yen.

Payments from investors for the new shares will be completed on Dec. 5.

Singapore-based fund Effissimo, established by former colleagues of Japan's most famous activist investor Yoshiaki Murakami, will become the largest shareholder in Toshiba with an 11.34 percent stake.

Toshiba agreed in September to sell its prized chip unit to a group led by Bain Capital for $18 billion. But potentially lengthy regulatory reviews mean the deal may not close before the end of March.

($1 = 112.6100 yen) (Reporting by Makiko Yamazaki; Editing by Mark Potter)