Wednesday, October 6, 2004
Hynix completes sale of unit to Citigroup fund
Reuters Seoul, October 6
South Korea's Hynix Semiconductor Inc, the world's fourth-biggest memory chip maker in 2003, said on Wednesday it had concluded the $830 million sale of its specialised chip division to a Citigroup fund.
The sale will help Hynix pay down its $3 billion debt and pour cash into its core memory chip business, a strategic alliance with French firm STMicroelectronics and a new factory in China.
"The sale was completed after full payment was made on October 6," Hynix said in a disclosure to the Korea Stock Exchange.
The announcement came after Hynix said on Tuesday it would conclude the deal this week.
"(The sale) will enable Hynix to focus on its core DRAM (dynamic random access memory) business, speeding up normalisation of its operations," Hynix's main creditor Korea Exchange Bank said in a separate statement.
Creditors own 81 per cent of Hynix following several multi-billion-dollar bailouts.
Citigroup Venture Capital (CVC), a unit of Citigroup Inc, received approval from Hynix creditors in June to buy the division for 954.3 billion won ($831.2 million), including 379.3 billion won in assumed debt. CVC plans hopes to improve the company's profitability and sell it off.
CVC will operate the unit, which makes flat-screen chips and digital camera sensors, as a separate company called MagnaChip Semiconductor Ltd. Shares in Hynix jumped 7.6 per cent to end at 12,750 won, beating the broader market's 0.29 per cent gain.
© HT Media Ltd. 2004.