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Last Updated:  Tuesday, 25 February, 2003, 05:47 GMT
Hynix rescue plan gets the nod
Shareholders in South Korean chip maker Hynix Semiconductor have approved a radical restructuring plan, aimed at putting the troubled firm back on a sound financial footing.

Under the plan, 20 out of every 21 common Hynix shares will be cancelled, a move that will cut the face value of the company's share capital to 1.3 trillion won (690m; $1.1bn) from 26.2 trillion.

This will pave the way for a debt-equity swap, allowing creditors to take control of the company.

The deal was pushed through in the face of opposition from minority shareholders, whose interests in the firm have effectively been nullified.

Brighter future?

Minority shareholders said they would be taking legal action to reverse the decision.

But with creditors already holding the majority of Hynix's voting stock, they seem to have little leverage to change company strategy.

Creditors have argued that only drastic action can save Hynix, the world's third-largest producer of memory chips.

The firm's future has rested on a knife-edge since it rejected a takeover by US rival Micron last April, despite suffering an acute shortage of cash in a desperately weak market.

Some analysts have argued that it would make more sense to allow Hynix to fail, rather than devoting time and effort to a risky rescue plan.




SEE ALSO:
Rescue plan for chip giant Hynix
30 Dec 02 |  Business
Hynix blesses split decision
09 May 02 |  Business
Hynix gets bankruptcy warning
08 May 02 |  Business
Micron abandons Hynix buyout talks
02 May 02 |  Business
Hynix ditches Micron rescue deal
30 Apr 02 |  Business
Strike threat over S Korean takeover
23 Apr 02 |  Asia-Pacific


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