Senior South Korean financial officials have ordered creditors of Hynix Semiconductor to re-establish its negotiations with Micron Technology in order to attempt to sell all or part of the memory chip maker before the Korean presidential elections, which are expected to take place in December. Hynix’s financial problems represent an embarrassment to the present Korean government who want the situation to be resolved before the start of pre election campaigning.
The majority of Hynix’s commercial lenders have already written off significant investments in the company. There would also seem to be little prospect of Hynix making a return to profitability in the short term. The company’s remaining creditors are made up predominantly of state owned banks. Experts believe that Hynix’s remaining creditors may not have any choice but to accept a discounted offer from Micron for the company.
Micron had a $3.4 billion bid for Hynix turned down in April of this year. The company has yet to return to the negotiating table and has been reluctant to make a new bid while the current malaise in global memory chip sales continues.