Hynix creditors to vote on China DRAM fab plan

Green light expected for STMicro JV

By Tony Smith • Get more from this author

Posted in Financial News, 5th August 2004 09:24 GMT

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Hynix will today get the green light from its creditors for its scheme to build a $1.75bn DRAM fab in China.

The fab will be co-funded by European chip maker STMicroelectronics, and has been the subject of talks that have taken place between the two firms for most of the year.

It's this co-operation that appears to have persuaded Hynix' creditors to OK the deal having originally been opposed to it. The creditors own around 80 per cent of the memory maker. Today, it is believed, they will formally give the JV their blessing through a vote on the proposal.

"We expect to get approval for the plan this time, as several main creditors have changed their position to support it," an official at one of Hynix' creditor banks told the Financial Times this week.

if the plan goes ahead, Hynix and STMicro will both put $500m into the project, with Chinese banks and institutions tossing in a further $750m.

Hynix is on a roll right now, having broken its profitability records during Q2 on sales that pushed the company past Micron to take world number two DRAM maker spot.

However, the company also faces the prospect of an official Japanese Finance Ministry enquiry into the alleged unlawfulness of the rescue funding its creditors have pumped into it at the turn of the Century. ®