By Kim Yoo-chul
SK Telecom said Friday it has no plans to issue new shares to raise money for the purchase of Hynix.
The announcement comes after SK Telecom became the preferred negotiator for the Korea Exchange Bank (KEB) _ the main shareholder of the Icheon, Gyeonggi Province-based Hynix.
In a statement, KEB said SK Telecom was qualified to be the new owner of the semiconductor manufacturer.
``SK Telecom won’t make a rights offer for cash to buy the memory chipmaker. We also don’t have a plan to sell some of our core assets for financing,’’ said a senior SK executive.
SK Telecom offered 3.5 trillion won to Hynix shareholders to buy 20 percent of Hynix including 10 percent more in a premium for management, officials said requesting anonymity.
The SK executive said cash-equivalent assets held by SK Telecom as of the end of the third quarter of this year were 2.2 trillion won.
``SK Telecom will raise the money from local banks and we don’t see any major obstacles in borrowing with a low interest rates as SK maintains a stable credit rating _ AAA,’’ said the executive who is directly involved with the deal.
Total assets of SK Telecom surpass 20 trillion won; and the firm has already received a letter of commitment for 2.5 trillion from Woori and Kookmin banks.
``It’s totally groundless to say that SK Telecom will have financing problems for the Hynix deal as we believe SK Telecom is very stable in cash-flow with a top-level credit rating compared to other local companies,’’ said Song Jae-kyung, an analyst at KTB Investment.
Shares of SK Telecom rose by 3.1 percent to end at 149,500 won on the Seoul bourse this week, according to data from operator Korea Exchange (KRX).
Creditors-turned-shareholders of Hynix have searched to recoup ``billions of dollars’’ that they spent to sustain the debt-ridden chipmaker years ago following the Asian financial crisis.
Plans to give management control to a local firm for fear of a potential leak of advanced technologies has dampened interest in Hynix especially at a time when investors are avoiding the capital intensive and cyclical memory chip sector.
Despite the push, financial markets were divided over SK’s decision to run the chip-making business that is labor- and cash-intensive. Some 2 trillion won is needed annually just for technology upgrades and maintenance.
``SK Telecom’s financing plans do make sense. But its shares will feel downward pressure over the short-term as the company didn’t unveil more details on synergy that it sees after the acquisition of Hynix,’’ said Kang Ji-hoon, an analyst at Samsung Securities.
``SK Telecom is insisting that it can create synergy by running the chip-making business. When we see a diversification of business portfolios, then that looks good, however, the company doesn’t have a history in running a chip business,’’ said Choi Gee-hu, an analyst at Daewoo Securities.
Fitch Ratings earlier said that if SK Telecom buys the stake with debt, ``the company’s credit strength may be impaired.’’ And Standard & Poor's echoed in a statement that the purchase would undermine the top local mobile carrier’s credit rating.
Also, SK Group Chairman Chey Tae-won is being investigated for allegedly embezzling company funds. Top local prosecutors raided the offices of some SK Group affiliates and took away boxes of classified documents as part of the investigation.