Creditor Organization Will Decide on Hynix Support Proposal Today

The creditor organization for Hynix Semiconductor held a representative meeting on September 3 and made a decision on the aid proposal for investment conversion, interest reduction and financial normalization.

Shareholding creditor bank, Korea Exchange Bank tried to finalize a support package of 6 billion and 7000 million won on August 31, but extended the deadline to today because the objection was raised that it would be difficult to revive Hynix through one bank`s fresh support. However, Korea Exchange Bank`s Lee Yeon-Soo stated, ``The support proposal to be formulated at the representative meeting on September 3 will only partially modify proposed measures on investment conversion and such, but is otherwise not that different from the existing proposal.`` It is unlikely that the support proposal will be finalized today.

A commercial bank manager said, ``A part of the creditor organization is requesting `a support package that can revive` and changes in the proposal can be made immediately before the meeting.`` Financial analysts argue that a new investment of 4 billion won is needed in order to revive Hynix.

However, Shinhan and other banks are holding the position `new investment support is absolutely impossible` which makes mutual agreement difficult. In such scenario, court decision is a possibility.

The existing normalization plan includes: 3 billion won in investment conversion (2 billion won in convertible bonds, 1 billion won in new shares to be purchased), assignment of 3700 million won from next year`s corporate exchange investment to deficit investment, extension of maturity date for 1 billion 7200 million won in investment and lease.

Lee Na-Yeon larosa@donga.com