HHI interested in Hynix

By Kim Yoo-chul

Hyundai Heavy Industries (HHI), the world’s biggest shipyard, is thinking of throwing its hat into the ring for the giant memory chip maker Hynix Semiconductor, which is up for grabs.

A senior insider from a Hynix creditor said Tuesday that Hyundai Heavy is mulling over submitting a letter of intent (LOI) for the company.

``I can confirm that HHI has a keen interest in the controlling stakes in Hynix Semiconductor,’’ said the source from a creditor who asked not to be named citing company policy.

A total of nine creditors are involved in the sale including Korea Finance Corp. (KoFC), Korea Exchange Bank (KEB), Shinhan Bank and Woori Bank with the deadline for presenting LOIs July 8.

Local media reports are saying HHI has decided to make a sole bid for the chip maker as part of the former’s strategy of regaining the family conglomerate. Hynix was formerly Hyundai Electronics.

This marks the third attempt to find a new owner for the top-tier semiconductor manufacturer after textile-focused Hyosung earlier dropped its ambitious bid for Hynix.

But the head of state-run KoFC said that it has yet to receive any business proposals from Hyundai Heavy or any others.

``Still, no companies have approached us,’’ KoFC head Ryu Jae-han said in a telephone interview.

The CEO reiterated that the deadline could be extended by about two weeks should only one bidder declare an interest.

KoFC is mulling the possibility to give the ``full right’’ for a buyer to manage Hynix by buying only five percent out of the 15 percent stake on offer, according to its officials.

Leading creditor KEB said that shareholders will pick a preferred bidder in August with the aim of completing the deal this year.

A senior Hynix spokesman Park Hyun declined to comment, while a Hyundai Heavy spokesman Jo Seung-woo was mum on whether his firm will file an LOI before the deadline.

Creditors own 15 percent of Hynix stakes worth more than 3 trillion won.

But pessimistic views have arisen over the sales process as the memory chip industry has shown signs saturation as the product has already been commoditized with too many market players.

Another pending issue is whether Hynix has the ability to churn out full sets of advanced chips although the company CEO Kwon Oh-chul said advanced computer chips applying a finer 38-nanometer technology will significantly help the corporation achieve good bottom lines.

``Doubts have lingered over any synergy from the deal but Hyundai Heavy will see some advantages in the sense that it will be able to assume a sizeable company at a reasonable cost,’’ said Han Young-soo, an analyst at Samsung Securities.

Hyundai Heavy is known to have 10 trillion won in cash or cash equivalents, which would be enough to buy Hynix without turning to lenders, Hyundai officials said.

Hynix shares rose by 3.9 percent to end at 28,000 won per share on the nation’s main bourse in what stock analysts say is due to reduced uncertainties over the stake sale process.

In contrast, Hyundai Heavy lost by 1.3 percent, data from the Korea Exchange (KRX) showed.