Micron Asks Hynix Creditors $1.5B Loan For Deal - Report
DOW JONES NEWSWIRES
SEOUL -- Micron Technology Inc. (MU) is seeking a $1.5 billion loan from the creditors of Hynix Semiconductor Inc. (Q.HYY) in return for Micron's purchase of Hynix's memory chip operations, a local online news provider said.
Moneytoday.co.kr quoted a creditor bank official as saying that Micron has asked Hynix's creditors to provide new loans of $1.1 billion to Micron Korea, which will be created to run Hynix's memory chip operations.
Micron also asked creditors to buy $400 million worth of 30-year subordinated bonds at a 2% annual interest, the creditor bank official said.
Hynix on Thursday said that Micron has offered to buy Hynix's memory chip operations and possibly a part of its non-memory operations for about $4 billion.
Hynix officials declined to comment, while Micron couldn't be immediately reached. Officials at Korea Exchange Bank (Q.KEB), Hynix's main creditor bank, also declined to comment.
The report said the creditors' reponse to Micron's demand was mixed. Some are for lending to Micron, while others oppose any new funding, it said.
The report also quoted the creditor bank official as saying that it would be difficult for creditors to accept Micron's request for $400 million in lending over 30 years at a low interest rate.
-By Suh Hae-sung, Dow Jones Newswires; 822-732-2165; hae-sung.suh@dowjones.com
Micron Technology, which plans to pay for Hynix's assets in the form of cash and its shares, has offered to compensate creditors if its shares fall below $35 each, the report said.
Proceeds from the Hynix asset sale are likely to be used mostly to pay off Hynix's creditors which provided two multibillion-dollar bailouts since last year.
Hynix's debt totaled 8.64 trillion won ($1=KRW1,315) late last year, which will be lowered to about KRW5 trillion after a KRW3 trillion debt-to-equity swap as part of a bailout agreed on in November. Hynix has a separate foreign debt of $1.14 billion.
Creditors will own nearly half of the company after the debt swap.
The report didn't specify what portion of Micron's payment will be in the form of shares.
Micron shares closed Thursday 2% down at $38.25.
The U.S. chipmaker is asking creditors to sell 50% of their Micron shareholdings one year after payment is made and sell another 25% gradually each year from then on, the report said.
Micron also required that 50% of Micron shares given to creditors be kept in an escrow account so that it can take back shares for any additional debt it finds in Hynix after the sale.
Micron also said if there is debt above the value of Hynix's assets, it would take the additional amount from the $4 billion payment.
Updated February 15, 2002 3:47 a.m. EST |
