Creditors Not to Sell Hynix to Foreign Bidders
By Kim Yoo-chul
Staff Reporter
Chief executive of Hynix Semiconductor said Friday its creditors have reached a "broad consensus" to auction off the world's No. 2 memory chipmaker to South Korean bidders.
"Creditors have virtually agreed not to sell Hynix to foreign buyers," Kim Jong-kap, CEO of Hynix told reporters in Yeouido, northern Seoul.
"It's possible for foreign bidders to partly participate in the sale process, however, managerial rights will be secured by a local buyer," Kim added.
Major shareholders of Hynix picked Credit Suisse, Woori Investment & Securities and Korea Development Bank late last year as lead managers of the planned sale of 36 percent of the chipmaker.
Prospects for the sale have slightly brightened as the global chip industry is showing signs of a turnaround from a years-long slump driven by industry consolidation and price upturn of benchmark DRAM prices.
A 36 percent stake is worth some 1.2 trillion won at current market prices, less than a quarter of its value in early June, when the stock hit its 2008 peak.
Earlier, Kim expected several South Korean candidate buyers would appear as the sector is expected to pick up in the second half of the year.
"Some unnamed local candidate buyers have been in acquisition talks with our creditors," Kim said, without elaborating further.
The top official said his company is set to expand the technology gap with its followers by more than two years by investing 10 percent of yearly sales to research and development (R&D).
"It's possible for the global market to turnaround in the latter half of this year, though the general outlook is still dim," Kim said.
"But one hopeful sign seen in the industry are changes in the supply side. The global memory chip market is forecast to draw an 'L' curve in 2009," according to Kim.
Hynix posted a net loss of 1.328 trillion won in the fourth quarter of last year, including 318 billion won in foreign-currency exchange loses. Operating loss was 782 billion won ― the worst performance since it began reporting quarterly results in 2003.
On a question over eight-year-long litigation woes with the U.S. chip designer Rambus, Kim said the situation was turning to the Korean side after the Delaware District Court ruled that Rambus can't enforce patents in suits against Micron due to document spoliation.
"The recent ruling will be positively affect us," Kim said.
"A lower U.S. court will make a final ruling over a separate litigation case with Rambus. We will immediately appeal if the ruling isn't satisfactory," he added.
Rambus is in a multibillion-dollar legal battle on several fronts with memory chip makers including Hynix, Micron, Samsung Electronics and Nanya Technology.
Rambus has brought an antitrust case against Micron, Hynix and Samsung, alleging that they are engaging in price fixing and hurting sales of its DRAM memory chips.
Kim's remarks came after the top Rambus marketing official Tim Messegee told The Korea Times that his company was "confident" about the outcome.