Feeds

Creditors cast doubt on Hynix bail-out plan

Another entry for fuckedcompany.com?

  • alert
  • submit to reddit

Top 5 reasons to deploy VMware with Tegile

Hynix's $5.4 billion debt rescue plan is, like the troubled memory maker itself, in danger of collapse after a creditors' meeting failed to back the company's plan.

Essentially, Hynix wants to borrow a further 500 billion won. It also wants the banks to extend its repayment terms for 2.1 trillion won it has already been lent, and to swap three trillion won of debt for bonds that can be converted into equity at some future date.

Hynix got its creditors to agree to the debt-for-equity plan, according to a Korea Exchange Bank spokesman, cited by Bloomberg. However, that scheme is simply a way of reconfiguring Hynix's existing debt and won't help the company in the short term. Rather more important - if not to say essential - is the creditors' failure to come to a decision on the 500 billion won loan Hynix desperately needs to stay in business.

The signs are not good. KEB president Kim Kyung Lim stressed the importance of the loan in a press conference after the creditors' meeting. "Without the fresh loans, the future of Hynix is uncertain," he said, but added that his fellow creditors will "find it extremely difficult to support Hynix if DRAM prices do not show signs of recovering to $1.50".

In short, the money Hynix needs to dependent on the world DRAM market, and that shows no sign of recovery in the near future.

Certainly other creditors are unwilling to give Hynix any more money. Before the meeting took place, representatives of Korea's Hana Bank and H&CB said they would not agree to extending Hynix's credit. Shinhan Bank and Kookmin Bank yesterday took the same stance.

KEB appears willing to lend Hynix money, as does Hanvit Bank. Hanvit governor Lee Deok-hoon last week said it makes more sense to lend Hynix the money than let it collapse, but the bank this week said it would only agree to extra loan if other creditors would do so too.

New Korean laws mean that Hynix's rescue plan can't go ahead without the agreement of its creditors. And there's clearly not much sign of that happening. ®

Related Story

Hynix creditors fail to agree on loan provider

Intelligent flash storage arrays

More from The Register

next story
I'll be back (and forward): Hollywood's time travel tribulations
Quick, call the Time Cops to sort out this paradox!
Megaupload overlord Kim Dotcom: The US HAS RADICALISED ME!
Now my lawyers have bailed 'cos I'm 'OFFICIALLY' BROKE
MI6 oversight report on Lee Rigby murder: US web giants offer 'safe haven for TERRORISM'
PM urged to 'prioritise issue' after Facebook hindsight find
BT said to have pulled patent-infringing boxes from DSL network
Take your license demand and stick it in your ASSIA
Right to be forgotten should apply to Google.com too: EU
And hey - no need to tell the website you've de-listed. That'll make it easier ...
Assange™ slumps back on Ecuador's sofa after detention appeal binned
Swedish court rules there's 'great risk' WikiLeaker will dodge prosecution
prev story

Whitepapers

Go beyond APM with real-time IT operations analytics
How IT operations teams can harness the wealth of wire data already flowing through their environment for real-time operational intelligence.
5 critical considerations for enterprise cloud backup
Key considerations when evaluating cloud backup solutions to ensure adequate protection security and availability of enterprise data.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Simplify SSL certificate management across the enterprise
Simple steps to take control of SSL across the enterprise, and recommendations for a management platform for full visibility and single-point of control for these Certificates.