Hard disk maker Western Digital has announced plans to raise $3.17 billion by selling a portion of its stake in former unit Sandisk. The company will sell the shares through a secondary share sale at a 7.7% discount to Sandisk’s last closing price.

The deal involves 5.8 million Sandisk shares, which Western Digital will swap for debt held by affiliates of J.P. Morgan and BofA Securities. Both banks, acting as lead bookrunners, will sell the shares on behalf of their affiliates.

Following the sale, Western Digital will retain a stake worth nearly $1 billion, which it plans to sell in the future. Sandisk shares fell about 2.13% in after-market trading on Tuesday, reflecting market reaction to the news.

This move allows Western Digital to unlock cash while gradually reducing its holding in Sandisk, a strategic step in managing its investment portfolio.