Hynix creditors told to re-establish Micron talks
A senior South Korean financial official has told creditors of Hynix Semiconductor Inc to renew negotiations with Micron Technology Inc of the US, with a view to disposing all or part of the debt-laden memory chip maker before the next Korean presidential election in December.
According to the Korea Economic Daily, Lee Keun-young, chief of Korea's Financial Supervisory Commission (FSC), said that "Hynix must be sold overseas before the December presidential elections."
The Korean establishment is clearly seeking a resolution of Hynix's long-running problems before they become caught up in pre-election campaigning, when they would inevitably be an embarrassing issue for the present government. However, having already had a $3.4bn offer for the bulk of Hynix rejected last April. Boise, Idaho-based Micron is by no means certain to want to come back to the table, particularly as there is still no clear end in sight for the current downturn in global memory sales.
Nevertheless, with most of Hynix's commercial lenders having already written off their investments in Hynix, and with little prospect that the company can be brought back to profitability in the near term, the remaining creditors, who are largely state-owned banks, may have no choice but to come knocking a Micron's door again. This time though they will probably have to offer Hynix at a knock-down price.