Hynix Will Sell LCD Business to China

Hynix is scheduled to sell TFT-LCD business to China.

Hynix announced to make MOU prescribing the disposal of HYDIS (the business of TFT-LCD) to BOK, China on September 26.

Its selling amount is US$ 380 million. However, Hynix expects to increase the amount according to the results of due diligence investigation. Hynix and BOK will sign the Agreement until October 25 and will complete the business transfer by November 30.

The business will be sold through asset sale. It is the fixed asset related to TFT-LCD of Incheon factory. BOK promised to take over all 1600 employees in HYDIS in MOU.

Hynix tried to sell TFT-LCD business to a consortium led by Candusa corporation, Taiawn from the end of last year, but stopped a negotiation in the early months of the year owing to a difference of acquisition condition.

The official of Hynix said “BOK has the sufficient mobilization of capital as the company registered at China Stock Exchange. Accordingly, they don’t have a big problem in acquiring the HYDIS.”

Besides, Hynix which has been in difficulties owing to the decrease of the semiconductor price, will be relieved in a money circulation for a while through the disposal of HYDIS. Hynix said “As we sell TFT-LCD, a largest part of non-core businesses, we can execute a good progress in the business restructuring. The selling amount will be used for a new investment and operating fund on the semiconductor business.”

Manufacturing a computer peripheral such as CRT and monitor, BOK has a head office in Beijing, China. At the end of last year, BOK acquired the universal LCD(TN/STN LCD) business of HYDIS. Through acquisition of TFT-LCD business, BOK plans to take off to the display-specialized firm.

HYDIS has earned the operating income of KRW 74 billion and sales of KRW 470 billion in the first half of the year.

Joong-Hyun Park sanjuck@donga.com