(2nd LD) Creditors extend deadline to accept bids for Hynix stake

(ATTN: UPDATES share price in last para)
SEOUL, Feb. 1 (Yonhap) -- Creditors of Hynix Semiconductor Inc. said Monday that
they have extended the deadline to accept bids for a controlling stake in the
world's second-largest memory chipmaker.

"The creditors have decided to extend the deadline for two weeks up to February
12, a day before the start of the lunar new year's holiday," said the Korea
Exchange Bank, (KEB), Hynix's lead creditor, in a release statement.
"We believe that there are some companies that did not have enough time to go
over buying the stake, as they were in the middle of setting up management plans
for the new year," it said.
KEB said earlier on Friday, the original deadline for the bidding, that Hynix's
creditors failed to sell their 28 percent stake in the company as they drew no
bidders.
The creditors put their controlling 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.
LG Group, which has electronics giant LG Electronics Inc. under its wing, was
long touted as a potential buyer. LG Electronics is in stiff competition with
Samsung Electronics Co., also the world's largest chipmaker, in the global TV and
mobile phone market.
Some analysts, however, have downplayed the possibility.
"LG Group is focused on its key businesses such as liquid crystal displays (LCD),
mobile phones, oil, gas and chemicals. Those businesses are easily swayed by
economic conditions," said Lee Hun, an analyst at Korea Investment and Securities
Co. "Adding a semiconductor business, which fluctuates far more wildly, to its
portfolio would be burdensome for LG."
Hynix creditors held a conference for investors last month as part of efforts to
encourage potential buyers to purchase the chipmaker. But as such attempts have
fallen flat, the creditors were 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 last week.
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.
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.
Shares of Hynix closed at 23,100 won on Monday, up 1.54 percent from the previous
session.
ygkim@yna.co.kr
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