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Mon, Mar 18, 2002 - Page 21 News List

Hynix's main creditors agree on sale to Micron

BLOOMBERG , SEOUL

Hynix Semiconductor Inc's main creditors have reached an "in principle" agreement to sell most of the company's assets to Micron Technology Inc in a transaction that will create the world's biggest computer-memory chipmaker.

A final agreement is still to be reached on some of Hynix's liabilities and the loans Korean banks will make to Boise, Idaho-based Micron once it completes the takeover, said Chung Hyung-yang, a credit officer at Korea Exchange Bank, the main creditor.

``We still have some issues to iron out,'' said Chung, who returned today from the sixth round of negotiations led by Hynix Chief Executive Park Chong Sup. Park hasn't yet returned from the talks.

A sale, which some Korean newspapers have valued at US$4 billion, would bring to an end 15 weeks of negotiations, and allow KEB and other creditors to recoup some of Hynix's 6.25 trillion won (US$4.7 billion) of debt. Both Hynix and Micron have declined to comment on the value of the sale.

Micron's takeover of most of Hynix's assets "would be good for banks since they can recoup some of their money," said Jay Kim, a semiconductor analyst at ING Barings in Seoul who has a "hold" recommendation on the firms stock.

"It would be negative for Hynix stock price, but positive for the global chip industry as a whole" because Micron's management of Hynix production could help curb supply, boosting chip prices, Kim said. Negotiations include the possibility of Hynix creditors extending loans to Micron Korea Inc, a company that will manage the acquisition, to upgrade the plants.

Micron may need to buy more equipment because the Korean company did not have money to spend last year. Hynix said it spent 300 billion won on new gear, about 10 percent of what Samsung spent.

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