Deutsche Bank proposes massive debt rescheduling for Hynix
Deutsche Bank proposes massive debt rescheduling for Hynix
Agence France-Presse, Seoul
The foreign financial advisor of South Korea's ailing Hynix
Semiconductor Inc. has proposed a massive debt rescheduling plan
to stave off the company's credit crisis, reports said Sunday.
Korea Exchange Bank, the key creditor of Hynix, would convene
a meeting of creditors this week to discuss Deutsche Bank's offer
aimed at keeping afloat the world's third largest memory chip
maker, Yonhap news agency said.
Yonhap quoted an unnamed KEB official as saying: "Deutsche
Bank suggests Hyunix must normalize its operations and at the
same time push for its sale."
Deutsche Bank warned Hynix's crisis would deepen next year
without the rescheduling of its debt estimated at 6.2 trillion
won (US$5.1 billion), it said.
The foreign advisor suggested creditors should convert the
chipmaker's 1.85 trillion won debt into equity and extend the
maturity of bonds for up to three years.
Deutsche Bank has pored over the chipmaker's assets since the
failure of its deal with U.S. giant Micron Technology Inc.
earlier this year.
The proposed bailout package came after Hynix signed a deal
with China's BOE Technology Group last week to sell its liquid
crystal display unit for more than $380 million.
Hynix vowed to use the proceeds for restructuring. But
creditors have yet to approve a $210 million syndicated loan to
allow BOE to proceed with the deal.
Creditors have been divided over how to rescue the chipmaker.
Its fate would be tossed to the successor of President Kim Dae-
Jung, who is to step down next February.
Hynix has made virtually no new investments this year due to
huge losses, while creditors have been reluctant to extend new
loans.
Hynix saw its third-quarter net loss widen 48 percent to 617
billion won from 416 billion won in the second quarter. Losses
were 1.03 trillion won for the first nine months of the year.
Critics suggest Hynix should close outdated production lines
to reduce its heavy reliance on cheap synchronous dynamic random
access memory chips which account for about 70 percent of total
chip output.