Seoul, Korea – Hynix Semiconductor Inc.’s board endorsed its creditors plan to split up the chipmaker for a potential sale, Hynix said.
The approval was granted on a condition that the board, before implementation, must pass any creditor-led restructuring plans, Hynix said.
As an alternative to a failed asset sale to Micron Technology Inc. late last month, Hynix’s creditors proposed that Hynix be split up into “good and bad” assets, referring to the company’s operations in making memory chips, non-memory chips, and display monitors, reported Dow Jones.
The creditors suggested retaining or selling the ” good” assets, and liquidating what they considered to be “bad” assets. They didn’t reveal which would be considered “good” and “bad” assets.
The board asked creditors to confer with the company before naming an outside consultant to evaluate Hynix’s assets.
The approval comes after some tough words from the South Korean government and creditor bank officials, who endorsed the split in the days following the fallout with Micron. “The split plan would be the best for the company to avoid a court receivership,” said Financial Supervisory Commission Chairman Lee Keun-young.
By approving the plan to split, Hynix cedes any plans to survive as an independent entity, Lee said.