Hynix creditors may meet today on bailout

Hynix creditors will meet soon to discuss how to assist the debt-laden chip maker

In this story: Saddled with $4.3 billion in debt Sticking with chips RELATED SITES

By Staff and wire reports

SEOUL, Korea -- Creditors of Hynix Semiconductor will meet Wednesday to discuss whether to extend financial assistance to the ailing chip maker.

Salomon Smith Barney, a debt advisor to Hynix, has asked creditors to extend the maturity of $1.22 billion in debt held by the company. It also wants them to buy $760 million in convertible bonds.

Korea Exchange Bank, Hynix's main creditor, said Monday they will discuss those issues this week. The creditors are expected to approve the loan extension before Hynix starts its road show in early May.

"Creditors will meet on Wednesday to review Hynix's latest rescue plan, including a bond purchase and burden sharing," a spokesman for the bank said.

Saddled with $4.3 billion in debt

An official with one creditor bank had told a local newspaper the meeting could go ahead as early as Monday.

"We are pressed for time because Hynix is scheduled for an overseas roadshow early next month," the official added.

Hynix is trying to raise funds at home and abroad via asset sales and equity and bond issues to help repay $2.1 billion of its $4.3 billion in maturing debt this year.

Creditors are expected to roll over the rest.

If creditors can agree to spread out debt scheduling through 2005, Hynix would be in the clear.

The former Hyundai Electronics was saddled with LG Semicon in a state-directed takeover in late 1998 that the company is still paying for.

Sticking with chips

Last year's results reflected that as Hynix posted a net loss of $1.8 billion despite earnings before interest, taxes, depreciation and amortization (EBITDA) of just under $3 billion.

By contrast, rival Samsung Electronics chalked up record sales and profits in 2000.

Hynix CEO Park Chong-sup told reporters that the company would stick to the chip making business, while pulling out of non-core business investments and non-chip operations.

It's a message aiming as much at foreign investors as locals, as Hynix aims to raise $1.4 billion overseas mainly through global depositary receipts (GDRs) in coming months.

Hynix shares finished Monday up 10 percent, at 3,385 won, on the Korea Stock Exchange.

Reuters contributed to this report.

Hynix

Note: Pages will open in a new browser window

External sites are not endorsed by CNN Interactive.