Hynix creditors to invite bids for stake sale

(ATTN: ADDS responses from conglomerates in paras 9-16)
By Kim Young-gyo
SEOUL, Sept. 7 (Yonhap) -- Creditors of Hynix Semiconductor Inc. will invite bids
for a major stake in the world's No. 2 memory chipmaker and receive letters of
intent from potential investors this week, credit bank officials said Monday.
The chipmaker was put under joint supervision by creditors in October 2001, when
it faced a credit crunch amid a faltering semiconductor business climate.
Starting in 2001 and up to 2002, Korea Exchange Bank (KEB) and other creditors
injected US$4.6 billion to bail out Hynix by swapping the chipmaker's debts to
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.
Main creditor KEB said that managers for the sale of the chip maker are set to
send out invitational notices on the sale of a combined 28-percent stake in the
company.
The invitations were made only to South Korean companies as no foreign companies
showed interest, the bank said in an emailed statement.
The stake sale, which is estimated by the sellers to be worth 4.5 trillion won
(US$3.65 billion), is being managed by Credit Suisse Securities Ltd., Woori
Investment & Securities Co. and state-run Korea Development Bank.
Four to five domestic companies have already expressed their intent to invest in
Hynix, according to the officials at KEB.
Meanwhile, South Korea's major conglomerates declined to respond or reacted
negatively to the possibility that they will acquire the chipmaker.
"We have not yet received the notice, and therefore, it is not the right time to
announce our position," said an official at Samsung Electronics Co., the world's
largest semiconductor manufacturer.
Many market insiders find it unlikely that Samsung will buy its closest rival, as
it would be against the World Trade Organization's anti-monopoly regulations.
Officials at South Korea's second-largest conglomerate, LG Group, refuted the
possibility.
"Chairman Koo Bon-moo made clear in July that LG will neither buy Hynix nor (the
ailing) Daewoo Engineering & Construction and focus on its strength," an LG
official said. "We would like to be delisted from the list of potential buyers."
POSCO, the country's largest steelmaker, made a similar response.
"CEO Chung Joon-yang's visit to a Hynix plant was just a personal visit, just as
we previously explained," a company official said. "We aren't interested in
acquiring Hynix, which is totally not related to what we are doing."
Other conglomerates, including leading automaker Hyundai Motor Co., shipbuilder
Hyundai Heavy industries and STX Group, a mid-sized South Korean shipbuilding
group, also said they have no intention of buying.
The creditors plan to pick a preferred bidder within the year, they said.
Shares of Hynix closed at 20,950 won on Monday, up 0.72 percent from the previous
session.
The company reported a seventh-straight quarterly loss of 58 billion won in the
second quarter, compared with a 711 billion won deficit a year earlier. Some
analysts expect it will turn to black in the third quarter due to a recovery in
computer memory chip prices.
ygkim@yna.co.kr
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