Micron, Hynix deal hangs on debt, new loan
(UPDATE: Adds details, share price)
biz.yahoo.com
SEOUL, March 18 (Reuters) - The fate of a $4 billion deal to create the world's biggest memory chipmaker hangs on potential debts at Hynix and a loan extension to U.S.-based Micron (NYSE:MU - news) by Hynix lenders, a creditor bank said on Monday.
Negotiators at just-concluded talks in the United States had cleared several hurdles but the signing of a memorandum of understanding still hangs in the balance, an official at Korea Exchange Bank , Hynix's main creditor, told Reuters.
``We have still a long way to go and the chances of signing a memorandum of understanding are still 50-50,'' the official said.
Key sticking points such as the sale price for the deal, the extension of a loan to Micron and an investment by Micron in Hynix's non-memory business had been negotiated, he said.
``We agreed on the sales price and secured Micron's pledge to invest in the remaining entity of Hynix,'' the official said.
But the two sides need to negotiate further to resolve the issued of debt and the terms of a fresh loan extension to Micron by Hynix creditors, he said.
Heavily indebted Hynix Semiconductor Inc has been in talks since December with Micron Technology Inc on a deal to sell its core memory assets.
Hynix's creditors returned to Seoul over the weekend after a week of negotiations with Micron.
Local media reported Micron has insisted on putting 25 percent of its shares, which will be used to buy Hynix memory operations, in an escrow account and taking them back if additional losses are found after the takeover.
Creditors want the percentage reduced to around 10 percent, newspapers said.
Hynix creditors are set to meet this week to give a briefing on the results of the latest negotiations and to decide whether to sign a tentative agreement that would help create the world's largest memory chipmaker, surpassing Samsung Electronics Co .
A source close to the deal told Reuters last week Micron would buy Hynix's memory operations for $3.8 billion with its own stocks and invest the remaining $200 million with cash into the rest of Hynix.
Micron declined to confirm creditors' argument.
Hynix shares were down 2.4 percent to 1,625 won at 0040 GMT versus a one percent drop in the broader market . |
