Hynix Semiconductor Inc's largest shareholders, including Hyundai Merchant Marine Co, will give up their voting rights in the chipmaker to creditors as part of efforts to restore the company's finances.
Hyundai Merchant, Hyundai Heavy Industries Co, Hyundai Elevator Co and former Hynix Chairman Chung Mong-hun together own 19 percent of Hynix and pledged to relinquish their voting rights to lenders. The owners also gave creditors the authority to find buyers for their Hynix stakes, the Hyundai Group units said in separate statements.
The Hyundai Group companies are paying the cost for bailing out Hynix, the world's third-biggest maker of memory chips for computers, which is struggling to repay 5.7 trillion won (US$4.4 billion) of debt due this year. Hynix, which posted a first-quarter loss of 539 billion won, started marketing a sale of US$800 million in shares and US$350 million in bonds yesterday.
"We will accept the creditors' request," said Kang Sung-kook, a spokesman of Hyundai Merchant, which owns 9.25 percent of Hynix. The move "is in line with our attempts to help the affiliate and our separation from the Hyundai Group." Korea Exchange Bank and other Hynix creditors want to ban the Hyundai Group from managing Hynix and are trying to find buyers for the chipmaker and improve its finances. Korea Exchange Bank and Salomon Smith Barney Inc will arrange the sale of the Hynix shares owned by the Hyundai Group units and Chung, Hyundai Heavy said in a statement to the Korea Stock Exchange.
In return, the Hyundai Group units will be allowed to reduce their exposure to debts owed by Hynix's US affiliates.
Hynix promised it will buy back an equity stake in Hyundai Electronics America Inc, its US sales unit, from Hyundai Heavy, and unwind Hyundai Heavy's US$50 million debt guarantee for loans owed by the US sales unit, by the end of 2001.
Hyundai Heavy, Hyundai Merchant and Hyundai Corp will also be allowed to end their joint guarantee to purchase semiconductor wafers from Hyundai Semiconductor America Inc, Hynix's US production unit, "as soon as possible," Hyundai Heavy said.
RSS