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Hynix's biggest creditor nixes bailout plan

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Korea Development Bank demands an independent rescue scheme

By Tony Smith • Get more from this author

Posted in Business, 29th August 2001 13:25 GMT

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Korea's state-run Korea Development Bank will not lend any more cash to Hynix unless a respected third-party comes up with a solid plan to rescue the debt-ridden memory maker.

The debt bail-out scheme currently being touted by the Korea Exchange Bank and due to be discussed by Hynix's creditors at a meeting on Friday doesn't come close.

So, at any rate, says the Bank's governor, Chung Gun-yong, according to local media. He should know: the Bank has lent Hynix around one trillion won ($967.5 million) - sufficient, say some, to make the Korea Development Bank Hynix's largest creditor. Odd, then, that Chung claims not to have been invited to the 31 August meeting.

Chung reckons the KEB plan won't win the support of investors, and the only way they will be satisfied with any plan is if it has the backing of a "reputable third-party institution". If he has anyone specific in mind, he isn't saying who it is, but it's clear that only an independent body has the clout to persuade all the creditors and stakeholders that a given rescue plan can work. ®

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