Creditors fail to agree to new loans for Hynix Semiconductor
Creditors of Hynix Semiconductor Inc. have failed to agree to extend fresh credit to the troubled company, casting a shadow over its future.
In a much-delayed meeting Saturday, however, the presidents of 18 creditor banks agreed to swap Hynix's debt of 3 trillion won ($2.3 billion) for equity and roll over maturing debts, said Kim Kyung-lim, president of the main creditor Korea Exchange Bank.
"Creditor banks were at odds on the extension of 500 billion won in fresh loans," Kim said after the meeting. "We decided to reconsider the issue after monitoring the prospects of the information technology industry and chip prices in the wake of the terrorist attacks on the United States."
The extension of the new loans is considered essential for Hynix, the world's third-largest memory chipmaker, to remain competitive in the global semiconductor industry.
Floundering under heavy debts of around 11 trillion won, Hynix has been stung by falling chip prices, which have made it impossible to service its debts with operating incomes.
"The future of Hynix is uncertain without fresh funding," Kim said. "Creditors will find it hard to support Hynix if DRAM prices do not rise to a level of $1.50 from the current 74 cents."
It is unclear when the creditors will meet again to discuss the extension of the fresh loans, he said, adding that Salomon Smith Barney should reassess chip prices before that.
"I hope the creditor will call a meeting to discuss the issue at the earliest date possible," Kim stressed.
The postponement of a decision on the provision of fresh credit may lower Hynix's funds for facility investments to 1.2 trillion won from an estimated 1.7 trillion won.
To keep Hynix afloat, KEB and SSB have proposed a bailout package that includes the sale of new shares worth 1 trillion won, extending repayment on 2.1 trillion won of debt and refinancing another 410 billion won obligation on top of the debt-for-equity swap and new loan.
The proposal came three months after creditor banks agreed to extend repayment on more than $4 billion of debt when the company sold $1.25 billion shares overseas.
The creditor banks had originally planned to discuss the bailout package Sept. 7 but they had put it off due to differences in the extension of fresh loans.
(yskwak@koreaherald.co.kr)
By Kwak Young-sup Staff reporter
2001.09.17
koreaherald.co.kr |
