Main Hynix bank denies debt writeoff

SEOUL, South Korea -- Hynix Semiconductor's main creditor denies it is mulling a massive debt writeoff, as part of a deal with Micron Technology.

"We have not received any such request," a spokesman for Korea Exchange Bank told Reuters news agency.

Micron has asked Hynix creditors to write off around 5 trillion won ($3.8 billion) of its huge debt load, according to The Wall Street Journal.

That promises to throw a wrench in ongoing merger talks. Hynix's 16 banks are mulling the proposal, the newspaper reported Wednesday.

But Korea Exchange Bank has ruled out any chance of clearing the embattled company's debts.

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"We had already written off about half of Hynix debt and has no plan to forgive its debt any more," the spokesman added.

Hynix also denies writeoff

Hynix likewise denied the report, saying the talks are instead focused on clinching a buyout.

"The talks are focused on a merger with Hynix via the purchase acquisition method, not debt-write-off," Hynix reform chief Shin Kook-whan told Reuters.

Purchase acquisition refers to an accounting method where the buyer adds the other company's assets to its own, and later writing off any premium it pays as goodwill.

Micron, the world's No. 2 memory chipmaker, and Hynix, the No. 3, entered alliance talks in December to create the world's biggest memory chipmaker.

Hynix said the companies aimed to sign a memorandum of understanding (MOU) in January.

But CEO Park Chong-sup then admitted this week that the talks might take longer than expected, as differences need to be narrowed between Micron and the creditors.

Samsung, Hynix end day down

Hynix officials have repeatedly said a deal is imminent, while Micron executives have been more circumspect, at times even saying they see no need to buy any Hynix operations.

Hynix is reportedly considering selling its entire memory business to its U.S. rival, but price differences are delaying the deal, which could be worth $2 billion to $6.5 billion.

Memory chip prices have started to rebound from a near 90 percent plunge last year, easing some of the pressure on both companies.

Shares of Hynix closed on Wednesday down 5.14 percent at 2,675 won, on a day the main Korean index, the Kospi, fell 1.1 percent.

Also on Wednesday, Samsung Electronics, the world memory chip No.1, reported a 67 percent decline in net profit for the fourth quarter.

The Hynix competitor saw its stock slump 3.37 percent to 301,500 won. A Hynix-Micron tieup would exceed Samsung's capacity to form a new industry leader.