Remit Debt of 3 Trillion Won for Hynix

At 28th, EBN, a news provider of semi-conductor, reported that Deutsche Bank, the financial advisor of Hynix Semi-conductor, demanded for the remission of debt of 2.5 billion dollars to Korean creditors.

In the interview with EBN, the Vice President for International marketing of Hynixf said, “The creditors review the report of Deutsche Bank and a meeting in September will decide the final debt arbitration.”

At the end of June, the total amount of Hynix’s debt is 6.81 trillion won. Deutsche Bank says that only under the condition of remission of half the debts (secured and unsecured), sound financial status, Hynix can be sold into foreign market.

According to the program, the creditors should remit 75% of unsecured debt (3.57 trillion won) at least, and secured debt should be remitted because the secured value decreased.

At the end of April, creditors decided to sell Hynix to Micron technology with remission of 50% debt (1.78 trillion won). However, the demand by Deutsche Bank shows that the condition becomes worse than that time.

Deutsche Bank also suggests that there is a possibility for Hynix suffers cash flow difficulties in the beginning of the next year. So after the remission, the rest of debt should be rollover with maturity from 2004 to 2006.

However, the secondary financial industry such as financial companies opposes saying “The remission of unsecured debt at the end of April was forcible style as well” and added. “ The increase of remission rate can’t be accepted any more”. Therefore, it seems to be difficult to get consent from the creditors.

Do-Young Kim nirvana1@donga.com