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S Korean conglomerate Hyosung confirms intention to buy Hynix stake
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19:44, September 23, 2009

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South Korean conglomerate Hyosung Corp. said Wednesday it is considering purchase of a major stock in Hynix, world's No. 2 memory chipmaker, confirming Tuesday's announcement made by Hynix's creditor banks.

Upon a request by local bourse operator Korea Exchange, the company made the public announcement in a regulatory filing.

The company, however, added that they are yet to have reached a final decision.

Hynix's creditor banks, led by Korea Exchange Bank, said Tuesday that Hyosung Group applied for purchasing the company's 28-percent stake worth 3.65 trillion won (3.04 billion U.S. dollars), becoming the only bidder.

The creditors said they plan to finalize the deal by the end of November after conducting due diligence on Hyosung and receiving a final bid from the conglomerate.

Hynix, put under a debt workout program after facing a credit crunch amid a faltering semiconductor business climate in early 2000, ended it in May 2005.

Its creditors, who had earlier injected 4.6 billion U.S. dollars to bail out the company, have retained a controlling stake since then.

The local market, however, did not move in line with Hyosung's intention, with its shares closing at the lower limit of 84,400 won (70.7 U.S. dollars), dipping 14.92 percent from the previous session.

Considering the size of the two companies, with Hyosung's total assets standing at 8.4 trillion won (7.0 billion U.S. dollars) and Hynix's at 13.38 trillion won (9.5 billion U.S. dollars), analysts question whether the acquisition would be plausible, according to local media.

U.S. Investment bank Goldman Sachs also said "successful completion of a stake sale would be difficult," in its Wednesday report.

Source: Xinhua

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