The Korea Herald


Korea Finance head offers to resign over Hynix sale


Published : Aug. 16, 2011 - 19:25

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The head of policy lender Korea Finance Corp. offered to resign on Tuesday, taking responsibility for an uproar over the conditions of Hynix Semiconductor Inc.’s sale.

Early last month, top mobile carrier SK Telecom and shipbuilding conglomerate STX Group submitted preliminary bids for a 15 percent stake in the world’s second-largest computer memory chipmaker.

But rumors about a change in original sale conditions for the chipmaker have risen, raising speculation that the sale may hit a snag due to potential bid withdrawals.

Ryu Jae-han, chief executive of the KoFC, expressed his intent to resign early Tuesday, saying that he will take responsibility for the fuss surrounding the sale as undecided details about the sale conditions for the chipmaker were revealed to the media.

“Ryu expressed hope that the sale of Hynix would be pushed forward in a transparent and fair manner,” the KoFC said in a statement. Ryu took office in October 2009 for a three-year term.

His resignation came amid speculation that creditors are trying to give incentives to a hopeful buyer that will bid for large portions of the available stake without the issuance of new shares.

The creditors said earlier they are considering issuing new shares, a move to help the chipmaker bolster its financial strength and ease the burden of additional capital investment for the new owner.

A prospective buyer would be allowed to sell up to 10 percent of its stake, but it will be permitted to issue new shares only when it offers to bid for at least half of the 15 percent.

Ryu held a press conference on Thursday to dismiss the speculation, but market watchers said it was not enough to settle the noise surrounding the sale condition.

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

The creditors’ previous attempts to sell Hynix Semiconductor hit snags as volatile business conditions for the chipmaking sector and huge investments have made potential investors wary of buying the company.

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

(Yonhap News)