Hynix Financial Woes Coming to an End?
Online Staff -- EDN, June 17, 2005
The light at the end of Hynix Semiconductor's dark financial tunnel looks as if it's getting brighter.
According to news wire reports coming out of South Korea, this morning, the financially-troubled DRAM giant may get out of debt sooner than expected.
Seoul, South Korea's Chosun Iibo reported this morning that Korea Exchange Bank, of the chipmaker's biggest creditors, had reported that Hynix had recently raised $1.3 billion in fresh funds in Korean and abroad. This heightens the company's chances of completing a $750 million overseas bond issue, the newspaper reported, citing the company's creditors.
If that succeeds, Hynix will be able to pay off its debts as stipulated under its creditor's bailout plan a year and half earlier than originally anticipated, Chosu Iibo reported. Hynix nearly went bankrupt before its current creditor's came to its aid several years ago, which has led to U.S. and European allegations of unfair subsidies under World Trade Organization rules.
Which is another spot of good news for the Korean chip giant. European news wire service AFX News Ltd. reported this morning that the WTO has partially rejected the European Union's claims that Hynix was illegally subsidized by the Korean government. The WTO ruled that the bailout did not constitute illegal subsidies.
But the WTO upheld the EU's contention that backing by a state insurance company for Hynix exports and the purchase of Hynix bonds by the government-controlled Korea Development Bank in 2001 were commercially unjustifiable, AFX reported.
The EU slapped a 34.8 percent tariff on chips imported from Hynix Semiconductors Inc. earlier in 2003 following a U.S. decision to impose 44 percent tariffs on the DRAM manufacturer, in light of the bailout.
