The Korea Herald


New share sale to boost prospects of Hynix sale: analysts

By 황장진

Published : April 5, 2011 - 19:05

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The stalled sale of Hynix Semiconductor Inc. is likely to speed up as creditors of the chip maker are considering selling new shares to resume efforts to unload their stakes, market watchers said Tuesday.

Creditors of Hynix plan to resume the process to sell a 15 percent stake in the world’s No. 2 computer memory chip maker following a set of failed attempts to sell it. Investors have been wary of buying Hynix mainly because huge and consistent investment is needed to operate the chip maker.

Last week, the chief of state-run policy lender Korea Finance Corp. (KoFC) said creditors are considering issuing new shares, a move to help the chip maker bolster its finance strength and to ease burdens over additional capital investment for a new owner.

Market watchers said selling new shares is likely to help accelerate the stalled sale of Hynix Semiconductor.

“Given that there has been no prospective buyer for Hynix, the new share sale is expected to boost prospects for the sale of the chip maker,” said Kim Jang-yeol, an analyst at Mirae Asset Securities Co.

KoFC chief executive officer Ryu Jae-han said the new share issuance would help a potential buyer to take firmer control in Hynix, adding that creditors plan to meet this week to discuss the process to resume the sale.

Korea Exchange Bank is the biggest shareholder of Hynix with 3.42 percent, followed by Woori Bank with 3.34 percent and KoFC with 2.58 percent.

The creditors injected $4.6 billion to rescue the chip maker by swapping their debt holdings into shares in 2001 and 2002.

Hynix logged a net profit of 110.1 billion won ($101.1 million) in the final quarter of last year, down 83.2 percent from a year earlier. 

(Yonhap News)