Tue, Mar 17, 2009 - Page 12 News List

Hynix may have to raise US$1bn in funds: UBS


Hynix Semiconductor Inc, the world’s second-largest memory chipmaker, may need to raise 1.5 trillion won (US$1 billion) in funds this year because its cash reserves will run out in the third quarter, UBS AG said yesterday.

Hynix will need the money to fund debt obligations and investment plans, Robert Lea, an analyst at UBS in Seoul, wrote in a report.

The Ichon, South Korea-based company will probably require about 500 billion won if it’s able to defer debt payments by 12 months, UBS said.

“We expect Hynix to return to the market for fund raising within the next two quarters,” wrote Lea, who maintained his “sell” rating on the stock. “We expect Hynix’s net assets to continue eroding through 2009.”

Hynix currently has no plans to seek further funding and hasn’t reviewed such an option, company spokesman Park Hyun said.

The chipmaker said last month plans to raise additional cash would depend on market conditions. Hynix constantly reviews funding options to “endure any possibly prolonged market downturn,” senior vice president Kwon Oh-chul said during a conference call with investors on Feb. 5.

UBS said Hynix probably needed to repay US$850 million to US$900 million in debt this year. The estimate for Hynix’s funding requirements doesn’t include the US$397 million in damages the company was ordered to pay Rambus Inc over a patent infringement, UBS said. The South Korean chipmaker said last Wednesday it planned to appeal.

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