Creditors to Extend W800 Bil. in Financial Support to Hynix
By Kim Yoo-chul
Staff Reporter
Creditors of Hynix Semiconductor have agreed to provide 800 billion won ($552 million) in financial support to the struggling chipmaker.
``Creditors have tentatively agreed to supply a total of 800 billion won ― 500 billion won in fresh bank loans and 300 billion won through a capital increase ― in January next year,'' a spokesman of Hynix's main creditor Korea Exchange Bank (KEB) said Tuesday.
``The final agreement will come by Dec. 19. Currently, no official decision has been made yet,'' the spokesman said.
However, Hynix spokeswoman Park Seong-ae declined to comment on the matter, saying the world's second largest memory chipmaker was reviewing contingency plans to secure more operational funds amid the prolonged industry downturn, hit by rising inventories and decreasing demand for consumer electronics devices.
The agreement came a few days after Hynix, which trails Samsung Electronics on the chip market, received a positive sign from its creditors on the provision of fresh loans.
Last week, the company called on creditors led by KEB to offer emergency financial support of between 500 billion won and one trillion won.
Knowledge Economy Minister Lee Youn-ho said then that the government could seek an alternative plan for Hynix if creditors couldn't help the company.
Hynix has been facing a liquidity shortage owing to the weakened global semiconductor market. It posted its biggest quarterly loss in almost eight years in the third quarter as prices of DRAM and NAND flash memory chips plunged below break-even-point.
DRAM chips are used in traditional PCs, while NAND chips are used in high-end portable gadgets such as MP3 players and car navigation systems.
As part of an emergency plan to cut costs, Hynix decided to slash the number of its executives by 30 percent, cut its workforce and lower the pay of its CEO and executives.
Hynix CEO Kim Jong-kap recently said his company was not in a cash-burning situation. As of the end of the third quarter, Hynix's internal cash flow reached 1.2 trillion won.
Shares of Hynix declined 5.26 percent to close at 7,390 won on the nation's main bourse.