Hynix Semiconductors Inc appealed yesterday for support in its efforts to secure massive new aid to fight its debt crisis as it pursued talks with creditors.
The mainly state-controlled creditors are seeking to turn between 2 trillion won and 3 trillion won (US$1.56 billion and US$2.35 billion) of the world's third-largest memory chipmaker's debt into equity, banking officials said.
According to several Seoul newspaper reports, the maturity of another 3 billion won of debt would be extended by two or three years.
The proposal was made at a creditors' meeting Wednesday and Hynix, which desperately needs cash to stay afloat, said in a statement that talks were continuing.
The Hynix statement said, "We believe we need substantial funds to maintain our global leadership in the semiconductor industry. We will make a decision that will protect the interests of all parties concerned, including major shareholders and creditors, through full consultations with creditors and our financial consultants Salomon Smith Barney. Discussions are now underway on a financial package including plans to reduce our debt and improve our financial status."
The rescue plan for the former Hyundai Electronics -- which was officially spun off from the Hyundai Group on Aug. 1 -- is the second in three months. In June, Smith Salomon Barney organized a US$1.25 billion issue of global depository receipts.
The company has been fighting for the past year to meet debt obligations. Its efforts have been badly hit by the global slump in the semi-conductor industry.
At the end of March it had an estimated 11 trillion won in debt. This week Standard & Poors, the credit ratings agency, put Hynix and its US subsidiary on a long-term credit watch "with negative implications."
Nearly all the creditor banks are government controlled and the US commerce department has expressed concern at what US officials and industry experts have called public support to keep Hynix alive.
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