Go to contents

Hynix May Be under Legal Management

Posted August. 30, 2001 09:52,   


The government and creditors decided to put the Hynix Semiconductor Co. (HSC) under legal management if a new support plan for the company is not settled soon.

If the HSC is put under legal management, creditors including the Korea Exchange Bank (KEB), the Hanvit Bank (HB), and other investment trust companies will suddenly become insolvent due to their total loss of 2.7 ~ 5 trillion won. And Hyundai Merchant Marine Co. and Hyundai Heavy Industries Co., which had provided payment guaranty for the U.S. branch HSA, will be responsible for the guaranteed amount of 1.148 billion dollars. Since the stock price of companies and banks related with the HSC went down and the composite stock price index dropped as well, the stock market is being negatively influenced from the possible legal management on the company.

A high government official said yesterday, ``The government has a contingency plan to put the company under legal management if a new support plan for the company is not be prepared due to the opposition of the creditors.``

The official explained, ``If the HSC cannot immediately pay off a debt of 46 million dollar loaned by the Societe General Bank, the legal management may begin before Sept. 14th when the reconstruction acceleration law takes effect.``

Vice president Lee Yeon-Soo of the KEB, a main creditor for the HSC, said, ``If a new support plan is rejected due to other creditors` opposition, the company will not be able to be steady again and will be put under legal management.``

The Deutsche Bank analyzed that if the HSC is put in danger, the KEB will have to bear another 644 billion won of additional support fund. The bank also estimated that the Cho Hung Bank (433 billion won), Kookmin Bank (286 billion won), Shinhan Bank (222 billion), and the Housing and Commercial Bank (106 billion) would need a loss of 1.18 dollar as well.

In the meantime, Chung Kuen-Yong, chairman of the Industrial Bank, announced, ``Unless a firm revival plan that can persuade all creditors is prepared, we will not support the HSC.``