Creditors fail to sell Hynix

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SEOUL, Jan. 29 (Yonhap) -- Creditors of Hynix Semiconductor Inc. said Friday that
they failed to sell their stake in the company as they drew no bidders for the
world's second-largest memory chipmaker.
"As of 3:00 p.m. on Jan. 29, no company has sent a letter of intent (LOI) to
acquire Hynix Semiconductor," the Korea Exchange Bank (KEB), Hynix's lead
creditor, said in a released statement.
The creditors put their 28 percent stake up for sale this month for the second
time after a previous attempt to sell the stake fell through. Hyosung Group, the
sole bidder for Hynix, dropped its bid in November 2009.
Invitations for South Korean companies to submit bids went out Dec. 20. The
deadline for the LOI submission to buy Hynix was Friday.
Creditors held a conference for investors earlier this month as part of efforts
to encourage potential buyers to purchase the chipmaker. But as such attempts
have fallen flat, the creditors are now widely expected to attempt a block sale
of the stake.
"If the attempt to sell the chipmaker fails, creditors will consider various
options including a block trade," Ryu Jae-han, head of the state-run Korea
Finance Corp., which is also one of the creditors, said on Thursday, a day before
the deadline for the LOI submission.
KEB officials said creditors will hold a meeting in early February to discuss
"measures to stabilize management and stakeholding" of Hynix.
According to one official at a creditor bank, who asked for anonymity, the
creditors could still be open to accepting LOIs if investors are willing to
purchase the Hynix stakes.
Hynix was put under joint supervision by the creditors in October 2001, when it
faced a credit squeeze amid a faltering business climate for the semiconductor
industry.
From 2001-2002, KEB and other creditors injected US$4.6 billion to bail out Hynix
by swapping the chipmaker's debts for stocks.
Hynix ended its debt workout program in May 2005, after the company raised $1.25
billion to pay off its debt. The creditors have retained a controlling stake
since then, selling only a portion of what they held.
The largest stake of 6.4 percent is held by KEB, followed by Woori Bank with 6.25
percent, Korea Finance with 5.50 percent and Shinhan Bank with 4.75 percent.
Hynix remained silent on reports that no bids were offered for its purchase.
"It is up to our stakeholders," one Hynix official said.
The chipmaker posted a second straight quarter of net profit in the fourth
quarter of 2009 following seven consecutive quarterly losses thanks to a rise in
memory chip prices, according to earnings reports earlier this month.
Hynix also offered a rosy outlook for the first quarter of this year as strong
demand for personal computers and a rapid growth of the smartphone market is
expected to lift shipments of dynamic random access memory (DRAM) chips and NAND
flash memory.
"This year will be the first for Hynix to build its own managerial foundation,"
Hynix chief Kim Jong-kap told investors during a conference call.
One official with the Ministry of Knowledge Economy who asked not to be named
said the government will not push creditors to sell the stake in a hurry.
"If no buyer shows up, they will have to come up with some other measures.
However, it is doubtful that they will have to execute the sale hastily under
current circumstances," said the official.
"We are not considering selling the controlling stake to foreign companies," he
added.
ygkim@yna.co.kr
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