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Adviser Proposes More Hynix Aid

November 26, 2002

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SEOUL, South Korea (AP) _ A German financial adviser for Hynix Semiconductor Inc. said Tuesday that the financially troubled South Korean chipmaker needs another massive debt restructuring that includes a 1.9 trillion won ($1.57 billion) debt-for-equity swap.

In a report to a meeting of Hynix creditors, Deutsche Bank also recommended that the cash-strapped South Korean chipmaker be allowed to roll over its remaining debt totaling 3 trillion won (US$2.48 billion) until 2006.

If such measures are taken, the bank said, Hynix can survive on its own and repay its debts. Otherwise, the chipmaker would face a new cash flow crisis as early as the first half of next year, it said.

Hynix, the world’s third largest memory chipmaker, has been struggling under mounting debt and was taken over by its creditors, most of them government-controlled, in midsummer. That creditor group hired Deutsche Bank to develop a plan for creditors to regain their funds.

``The creditors have three options _ liquidation, sale or restructuring,″ the German bank said in the report. The bank ruled out liquidation and sale as viable options now.

Hynix’s main creditor, Korea Exchange Bank, offered a positive assessment to the bank’s recommendations.

In the first nine months of the year, Hynix lost 1.3 trillion won ($1.07 billion). Last year, the company lost 5.7 trillion won ($4.7 billion).

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