Hynix stock leaps on hints of sale


Creditors are mulling Hynix's future and think a sale would have a better chance before presidential elections in December

Staff and wires

SEOUL, South Korea -- Stock in Hynix Semiconductor jumped 5.8 percent on Thursday to close at 550 won on the prospect of progress on its vast debts and stalled sale prospects.

Media reports drove the increase, suggesting Hynix's banks will push to sell the company before South Korea's presidential elections on December 19.

The Chosun Ilbo reported Thursday that lenders are under pressure to sell off Hynix and recover the debts it owes before the poll.

A memo from Hynix's lead creditor, Korea Exchange Bank, says that creditors expect a tougher time selling off assets after the election, the newspaper reports.

The candidates for president are expected to push for Hynix's survival as a sole entity, with sales to overseas companies typically politically charged in Korea.

Deutsche Bank filed a plan

CNN.com Asia

More news from our
Asia edition

Separately, the company's investment bankers are recommending its creditors write off $2.5 billion, almost half the company's $5.1 billion debt, Web site EBN Online states.

Hynix advisor Deutsche Bank has filed a plan recommending that level of debt forgiveness, the site reports. Several banks have already written off their exposure to the embattled chipmaker.

The bank's plan also recommends selling non-essential Hynix businesses, including its chip-foundry and liquid-crystal-display screen operations. Hynix would keep its focus Dynamic Random Access Memory chips.

Creditors are due to meet in September to chart what to do with Hynix, which risked complete collapse after talks to sell out to Micron Technology of the United States fell through in April.

The government in May threatened the company with liquidation (Full story), but officials have since said it is probably strong enough to survive on its own.

A Hynix spokesman told Reuters news agency that creditors are looking at a plan for the company and that Deutsche Bank has submitted a proposal. But he did not elaborate.

Earlier this month, Hynix posted a loss of $345 million for the first half of the year. (Full story)