Seoul, Korea – The board of directors of Hynix Semiconductor Inc. is likely to support the creditors’ plan of breaking up the chipmaker for sale, said a Hynix spokeswoman.
Hynix’s board of directors will meet to vote on whether to approve a proposal by creditors to divide the company, and identify “good” and “bad” assets with the intention of running or selling “good” assets, while liquidating the “bad” ones, reported Dow Jones.
“There is no reason for the board to oppose the plan since we (Hynix) are seeking to sell non-memory chip assets anyway,” said Spokeswoman Kang In-young.
Creditors also proposed appointing a consulting company for due diligence to identify the good and bad assets, she said.
Creditors came up with the idea of breaking up Hynix after a planned sale of Hynix’s assets to Micron Technology Inc. fell through due to a veto by the company’s board of directors.
Financial Supervisory Commission Chairman Lee Keun-young told Yonhap News Agency that the government would file for a pre-negotiated plan of reorganization to place Hynix under receivership if the chipmaker’s board of directors rejects the creditors’ plan to divide the company.
Creditor banks will own some 70% of Hynix after they convert about three trillion won in bonds into Hynix shares by June 1 as a part of a bailout package agreed to last October.
In a pre-negotiated plan, a company can head for court protection as soon as the company and creditors reach agreement on the terms of restructuring. A pre-negotiated case reduces the time needed for filing court receivership from usually more than a year to three months, Dow Jones reported.