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Hynix Semiconductor sees biggest fall in eight weeks

Hynix Semiconductor Inc shares fell by their furthest in eight weeks after the world's third-largest computer-memory chipmaker sold US$1.25 billion of new overseas shares for 25 percent less than Friday's market price.

Hynix ended down 9.4 percent at 3,715 won, its lowest close in two weeks, having earlier fallen 11 percent to a six-week low.

The shares have fallen 19 percent since Wednesday

Hynix on Friday sold shares to overseas investors at 3,100 won per share. The stock closed Friday at 4,100.

"Investors that are able to buy Hynix's overseas shares have no reason to hold on to the stock if they can buy them at a cheaper price," said Jeon Sang Pil, a strategist at Samsung Securities Co in Seoul.

The company sold the shares below their market price to entice those wary of its ability to repay more than 11 trillion won (US$8.5 billion) of debt as the price of its main product is below its cost of production.

It needed to raise a minimum 1.3 trillion won to convince creditors to reschedule US$4.4 billion of debt due this year.

Hynix was the most active stock traded in Korea for a fourth consecutive day, with about 402 billion won of stock changing hands.

That's 105 million shares, compared with a daily average since the start of the year of about 50 million.

Investors sold the stock even after reports it may have found a buyer for its flat-panel display unit.

Hynix plans to sell its non-chipmaking businesses as part of its plans to help focus its management, repay debt and return to profit.

Beijing Orient Electronics Group Co spokesman Chen Yanxun said that the company may join others to buy the Hynix unit. It did not identify which companies are interested.

Yeebo International Holdings Ltd Chief Executive Frankie Li said he may be interested. He valued the Hynix unit at about US$500 million.

Hynix said its LCD business accounted for 4.2 percent, or US$357 million, of its US$8.5 billion of sales last year.

The company offered 994.1 billion won of three-year bonds convertible into its stock last week following the sale of US$1.25 billion new shares overseas in an effort to generate capital to cover debts.
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