Hynix Creditors Search For Cash Flow Answers

Hynix Semiconductor's main creditor, Korea Exchange Bank, and its financial advisor, Salomon Smith Barney, started preparing a contingency plan for Hynix as gloom over global semiconductor market continues, Korea Exchange Bank said Sunday.

Korea Exchange Bank and Salomon will prepare the contingency plan based on an analysis of Hynix's cash flow. The creditors plans to dispose Hynix's liquid crystal display manufacturing business and Maxtor Corp., Hynix's external storage producing subsidiary, as a way of securing more than 1 trillion won ($769 million) cash.

Salomon said Wednesday that Hynix would experience a shortage of 1.5 trillion won worth of operating funds in the second half of the year, based on assumption that average price of semiconductor equals $1. However, Korea Exchange Bank said that Salomon's prediction of the semiconductor price is too pessimistic and that it would calculate a new cash flow of Hynix for the second half. The lender also will prepare emergency plans for Hynix based on four scenarios, assuming that average semiconductor price ranges from $1 to $3 in the first half of next year.

by Suh Kyoung-ho