LONDON – A group of creditor banks that turned Hynix debts into shareholding back in 2001 have announced plans to sell off as early as May, their 15 percent stake in the world's second largest DRAM maker, according to reports.
The stake is considered to be worth 3.1 trillion won (about $2.9 billion) but leading shareholder Korea Exchange Bank reportedly said that creditors-turned-shareholders of the Hynix would also consider selling newly-issued Hynix shares to give options to a potential buyer.
The shareholders have reduced their stake over the years and tried to liquidate the holding in 2009 but received only one bid from South Korea's Hyosung Corp. which was then withdrawn.
The collapse of Hynix occurred in the aftermath of an Asian financial crisis in 2001. There was talk that U.S. DRAM maker Micron Technology would buy the company and also arguments from foreign companies that it should be allowed to go to the wall, rather than be bailed out.
The Advanced Technology Investment Co. (ATIC) of Abu Dhabi, the government investment vehicle behind Globalfoundries Inc., signed a memorandum of understanding with the Korea Semiconductor Industry Association (KSIA) in January 2010, in which the two parties undertook to explore potential areas of collaboration in the semiconductor industry. A significant investment in Hynix was not discussed at the time, but nor was it ruled out.
The company had finally gotten into the black after 7 quarters of losses, closing of its US factory, and reductions in executive pay and positions. But though the market for DRAM will continue to increase over the next few years due to smartphones, gaming devices, tablets, ASPs will drop rapidly starting this year due to glut in supply. What is good for consumers i.e. higher DRAM content at the same pricing, is not so good for Hynix.
So, good if the company’s shareholders can sell sooner rather than later.
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