01/15 21:52
Hynix Creditors Deny Report Micron Seeks Write-Off (Update2)
By Heejin Koo
quote.bloomberg.com
Seoul, Jan. 16 (Bloomberg) -- Hynix Semiconductor Inc. creditors denied a report that Micron Technology Inc. asked lenders to write off about 5 trillion won ($3.8 billion) of their loans to Hynix as part of a proposal to buy its facilities.
``There was no request of any write-off,'' said Lee Youn Soo, senior managing director in charge of corporate credit risk at Korea Exchange Bank, Hynix's largest commercial lender. ``So far we've received a proposal on what Micron wants, now we plan to hand in what we want.'' He declined to elaborate.
The Asian Wall Street Journal, citing unidentified people familiar with the transaction, said earlier today the request from Micron, the second-largest computer memory chipmaker, excludes 3.1 trillion won in debt that the banks already agreed to swap for Hynix bonds convertible to shares.
Talks for a possible merger between Micron and Hynix, which began Dec. 2, may create the largest computer memory chipmaker with a 40 percent market share, overtaking Samsung Electronics Co. Still, success isn't certain and the risks of failure for Hynix are high.
``It will be better for both Micron and Hynix to come to an agreement,'' said Chris Legallet, chief investment officer at Newport Pacific Management in San Francisco, who manages $2 billion in equities, $550 million of which are in the Asia ex- Japan region. ``Hynix, especially, because the alternative is non- existence.''
Another Haircut?
Last year, Hynix creditors agreed to two multibillion-dollar debt-rescheduling packages, including debt-for-equity swaps, which kept the third-largest memory chipmaker in business and will make the banks its largest shareholders.
Hynix reported losses of 3.7 trillion won in the first nine months of last year and owes banks and other lenders 8.6 trillion won, more than twice its market capital.
Seven banks which held about one fifth of Hynix's 8.64 trillion won debt, agreed at the end of October last year to write off about 75 percent of their holdings in return for not providing additional financial support for the company.
Lee declined to say whether the remaining creditors were considering writing off further Hynix debt as part of the tie-up negotiations with Micron. ``We've already written off a large chunk of the debt,'' he said.
Creditors will not rush an initial non-binding agreement, Lee said. ``Talks are still in the early stages,'' he said. ``We have yet to come up with pricing and other details. It's too soon.''
He said creditors were not under any pressure to meet expectations that the two sides will sign a memorandum of agreement by the end of this month. |
