Hynix Semiconductor Creditors Fail to Sell Controlling Stake

Nobody Wants to Acquire Hynix

by Anton Shilov
02/12/2010 | 09:13 AM

After three attempts to sell off the controlling stake in Hynix Semiconductor, the world’s second largest maker of dynamic random access memory (DRAM). Despite of the fact that Hynix Semiconductor has been reporting rather high profits for some time now, large investors do not seem to be interested in investing into a DRAM company with high debts.

 

The group of nine financial institutions received no letter of intent from possible purchasers as they closed bids after extending an earlier closing date by two weeks. The third failed attempt to sell Hynix in three months will almost certainly prompt lenders to sell part of their combined 28% stake in portions to institutional investors. The creditors will review all options, including a block sale of some shares, Korea Exchange Bank, the main stakeholder in Hynix, said, reports Bloomberg news-agency. The creditor group is still open to accepting bids from interested parties.

“We will consider all options, including selling part of the stake. We can also discuss receiving a letter of intent from any interested buyer in the future,” KEB said in a statement.

Any purchaser of the stake would obtain control over a world-class player in memory chips, trailing only Samsung Electronics, and at a time when top manufacturers are recovering strongly due to rising demand for personal computers and other gadgets as well as increasing price of DRAM. But Hynix would come saddled with borrowings of 4 trillion won ($3.5 billion), notes Reuters news-agency.

Early this year the government of the United Arab Emirates showed interest in acquiring a stake in Hynix Semiconductor. Abu Dhabi, the capital of UAE, already controls Globalfoundries, the world’s third largest contract maker of semiconductors, and also has a large stake in Advanced Micro Devices, the world’s second largest supplier of x86 microprocessors. A stake in Hynix may help UAE to develop its own semiconductor industry.

In mid-January, 2010, the Advanced Technology Investment Company (ATIC) of Abu Dhabi and the Korea Semiconductor Industry Association (KSIA) announced on a memorandum of understanding in which the two parties will explore potential areas of collaboration in the semiconductor industry.