Hynix creditors approve restructuring plan

Dec. 30, 2002 – Seoul, Korea – Creditors of Korea’s Hynix Semiconductor Inc. have approved a restructuring plan for the chipmaker that includes a 1.9 trillion won ($1.58 billion) debt-for-equity swap, and a 21:1 capital write-down plan.

At a meeting held at main creditor bank Korea Exchange Bank (KEB), about 90 out of 114 creditors — including banks and non-bank institutions — participated in the vote, reported Dow Jones.

KEB had drawn up the proposals in November based on recommendations by Deutsche Bank AG.

Creditors, which took control of the company in June, own about 67% of Hynix.

The proposed capital write-down plan will need approval from Hynix’s shareholders at a meeting currently scheduled for early next year.

Of the 7.5 trillion won in debt exposure, creditors representing 91% of that debt voted in favor of Hynix’s restructuring plan with regard to selling non-core assets; 86% voted in favor of the debt-rescheduling plan which includes the debt-for-equity swap and the capital write-down plan; and 88.7% voted in favor of other initiatives to normalize Hynix’s operations.

For the restructuring proposal to go through, creditors with exposure to at least 75% of Hynix’s total debt had to back the plan.

KEB said after the debt-for-equity swap, Hynix’s debt-to- equity ratio will fall to 71% from 147% at the end of September.

Currently, the debt-for-equity swap is expected to occur in April next year.

Creditors also voted in favor of delaying the maturity on about three trillion won of outstanding debt until 2006, making the total bailout package worth 4.9 trillion won.

Hynix creditors also agreed to sell non-core assets worth 1.1 trillion won and continue to seek a buyer for the company’s memory chip operations.

Creditors plan to sign a memorandum of understanding with Hynix Semiconductor regarding the restructuring plan.


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