Creditors set to move ahead with aid package for Hynix<\/p>\n
SEOUL (AFP): South Korean banks are ready to push ahead with a
\nnew rescue package for Hynix Semiconductor Inc. despite haggling
\nover how to avert the collapse of the stricken microchip giant,
\nreports said Sunday.<\/p>\n
Yonhap news agency quoted unnamed bank officials as saying the
\npackage would focus on the conversion of three trillion won
\n(US$2.35 billion) of Hynix debt and convertible bonds into equity
\nto raise the company's paid-in capital.<\/p>\n
Creditors are to meet Monday to approve or reject the 6.7
\ntrillion won debt-rescheduling package drawn up by the Korea
\nExchange Bank and other state-controlled banks.<\/p>\n
Pressure is on the banks to save the world's third-largest
\nmemory chip maker, which employs 15,000 people and accounts for
\n4.0 percent of South Korea's exports each year.<\/p>\n
But minor creditors and shareholders have been reluctant to
\napprove the new package mainly due to concerns over capital
\nreductions and a rights issue.<\/p>\n
Investment trust companies which were badly burned by the 1999
\ncollapse of the Daewoo Group also oppose the package, and foreign
\nbanks are concerned about the company's debt estimated at 12
\ntrillion won.<\/p>\n
Foreign and local investors have dumped Hynix shares as the
\nchip-maker is widely viewed as having no future.<\/p>\n
Finance and Economy Minister Jin Nyum has threatened to put
\nHynix into court receivership if creditors fail to agree a second
\nmajor rescue in three months.<\/p>\n
Receivership would mean freezing all debt repayments. Hynix
\nhas to pay 1.23 trillion won in principal and 469 billion won in
\ninterest in the second half of this year.<\/p>\n
But Hynix's chief executive, Park Chong-Sup, warned last week
\nthat creditors would see the value of their loans to Hynix fall
\nsharply if they put the company under court receivership.<\/p>\n
Hynix needs at least 1.1 trillion won in fresh capital, Park
\nsaid, adding creditors would not require the company to write
\ndown its equity in return for converting its debt into equity.<\/p>\n
"There should be no capital write-down," as a condition for
\nthe debt-for-equity swap, he said.<\/p>\n
The new aid package is made up of 5.2 trillion won from
\nfinancial institutions and 1.5 trillion won from state
\ninstitutions Korea Credit Guarantee Fund and Korea Export
\nInsurance Corp.<\/p>\n
Investment trusts have been asked to roll over 1.2 trillion
\nwon of unsecured three-year bonds, which start maturing in
\nAugust, for another three years, and to halve the bonds' yield.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/creditors-set-to-move-ahead-with-aid-package-for-hynix-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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