By Kim Yoo-chul
STX Corp., the holding arm of the shipbuilding conglomerate of STX Group, has decided to drop its bid for Hynix Semiconductor.
SK Telecom is now the sole bidder for a controlling 20 percent stake in the world’s second-biggest memory chipmaker, which is worth about 3 trillion won.
``Economic uncertainties spiked by the debt-crisis in Europe will continue, and steady investment to help Hynix keep its competitive edge in chip-making technology would have pressed us financially,’’ STX said in a statement, late Monday.
STX added strategic talks with a Middle Eastern sovereign wealth fund for the funding needed to acquire Hynix stalled without a breakthrough due to big differences over conditions.
At least 2 trillion won is needed just for technology upgrades and maintenance.
As of the end of last year, STX had secured 3.5 trillion won in cash-equivalent assets, however, its corporate borrowing reached over 11 trillion won, pushing it to sell key corporate assets and to seek significant funding from a Middle Eastern fund.
Creditors-turned-shareholders plan to receive final bids for the chipmaker by October 24 and hope to complete the deal within November this year.
``With results from due-diligence, SK Telecom will soon make a decision about Hynix. But one thing clear is that our previous stance of buying Hynix hasn’t changed,’’ said Ko Chang-kook, an SK Telecom spokesman by telephone.
``SK Telecom believes that the chip-making business will create synergy with our existing mobile-focused businesses,’’ Koh said.
Financial markets welcomed STX’s decision and expected group related stocks to rise.
``We are positive over the decision by STX. The deal was too big for STX and it now needs to focus more on boosting its core businesses,’’ said Sung Ki-jong, an analyst at Daewoo Securities.
``Shipbuilding is also cyclical and volatile according to market situations and the formula is also exactly the same as the chip-making business. STX made a very reasonable decision,’’ said Kim Hong-kyun, an analyst at Dongbu Securities.
Two previous attempts to sell Hynix failed because of the slowdown in economic recovery and the need for additional funding.
Creditors pumped $4.6 billion into Hynix through debt-equity swaps in 2001 and 2002 to keep it afloat.