SK hynix to raise $500 million in block sale
By Kim Yoo-chul
Creditors of SK hynix, the world’s second largest memory chipmaker, plan to raise some $500 million by offloading half of their combined shares in the company.
The plan comes after the firm dropped its bid to acquire bankrupt Japanese chipmaker Elpida Memory, helping it recover investor confidence.
Market analysts had earlier claimed that there’s nothing SK hynix can gain from acquiring Elpida. ``Therefore, the plan by SK hynix shareholders does make sense in this timing,’’ said Kim Young-chan, an analyst at Shinhan Investment.
``Creditors of SK hynix will sell 23 million shares or a 3.2 percent stake with no discount, worth about some 580 billion won ($500 million),’’ a banking source said, Thursday. This is half of the total shares owned by creditors of the Korean chipmaker.
``Creditors will hold a meeting to discuss details about the block sale plan late Friday,’’ said the banking source, adding the creditors will ask SK Telecom to buy the stake, first.
"If SK Telecom refuses the offer, then they will sell the stake in the market,’’ said the source.
SK hynix, bought by mobile phone operator SK Telecom, reported its third consecutive quarterly loss in April. The chipmaker plans to spend around 5 trillion won in capital expenditure this year, according to officials.
SK hynix spokesman Park Hyun declined to comment, while an SK Telecom spokesman wouldn’t confirm the reports citing the sensitivity of the issue.
``Considering the brighter business outlook, SK hynix shares have seen a slight decline recently due to uncertainties about its previous plan to acquire Elpida. Uncertainties, however, have been eased,’’ said the banking source, who is familiar with the issue.
SK hynix shares traded at over 30,000 won in March, however, they fell below 26,000 won as its attempt to buy Elpida hurt investor sentiment, said analysts. In June last year, SK hynix shareholders sold 0.7 percent or 4.4 million shares with no discount.
``The block sale issue isn’t new. Therefore, its impact on SK hynix shares will be limited or short-lived,’’ said Song Jong-ho, an analyst at Daewoo Securities, another local brokerage.
Demand for memory chips will rise as the consumer electronics market is heading toward seasonally-favorable seasons, which is a good sign for SK hynix in terms of its bottom line.