UPDATE 1-Hynix hits snag on Micron's reported new demand
2/6/02 5:43 PM
Source: Reuters
(Adds details, Hynix comments, share prices)
SEOUL, Feb 7 (Reuters) - U.S. Micron Technology Inc has demanded creditors of South Korea's Hynix Semiconductor Inc inject 1.5 trillion won ($1.15 billion) in fresh funding instead of it raising its bid for Hynix's memory business, a local newspaper reported on Thursday.
Micron and Hynix rank second and third in memory output capacity and combined would be larger than leader Samsung Electronics Co.
"Micron has raised its purchasing price to around $4 billion but Hynix met obstacles as the U.S. chipmaker is newly demanding creditors inject fresh funds for operation," the daily newspaper Chosun Ilbo said, quoting an unidentified Hynix reform committee official.
Hynix, which owes 8.64 trillion won to commercial banks, declined to comment on the report and its main creditor bank was not immediately available for comment.
Micron made a similar demand in 1998 when it acquired the memory chip operations of Texas Instruments Inc for $800 million.
Micron received $750 million in financing from TI in exchange for it buying TI's memory operations in a combination of common stock and an assumption of debt totalling approximately $800 million.
Hynix and its creditors had proposed Micron buy the memory chip unit for close to $5 billion. Micron had previously offered just above $3 billion.
Hynix chief executive Park Chong-sup is in the United States seeking a deal, that could help curb output and buoy global chip prices.
Separately, the Korean chipmaker resumed cooperation talks with Germany's Infineon Technologies AG.
"Infineon people arrived in Seoul on Wednesday for negotiations," Hynix spokeswoman Kang In-young said.
"The talks will be about comprehensive issues to do with cooperation."
Although the German chipmaker wants a deal with Hynix, negotiations have not progressed significantly to discuss specific ways of forming alliances, the Financial Supervisory Commission chief said on Wednesday.
Shares in Hynix were down 25 won to 2,460 won at 0115 GMT compared with a 0.05 percent rise in the broader market .
A sale of Hynix's memory chip unit would allow it to recast itself as a financially stronger manufacturer of non-memory chips used in mobile phones, cars and other electronic devices. (US$1=1306.7 won)
Copyright 2002, Reuters News Service
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