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Critics suggest Hynix should close outdated production lines to reduce its heavy reliance on cheap synchronous dynamic random access memory chips which account for about 70 percent of total chip output.