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[EDITORIALS]Further Delay Won't Help Hynix

Published: 05 Jan. 2003, 20:11

The hope that we may somehow all put the fate of Hynix Semiconductor Inc. behind us was again not met last week, as creditor banks decided to postpone the decision on one of the items in the latest bailout proposal. The lengthy discussion by the creditors on Friday yielded an agreement to allow the ailing chipmaker to forget approximately 3 trillion won ($2.3 billion) in debt in exchange for issuing new shares for the bankers. That plan will take up to 3 months to implement, and require further consultations with investment trust companies and leasing companies that also have outstanding loans to Hynix. But the proposal to provide hundreds of billions of won in fresh cash to support the chipmaker's precarious operations was put on hold again. It likely reflected the creditors' judgment that they should put some more time on the clock and think about what to do in the meantime.

Last week's terrorist attacks in the United States certainly complicated the matter, and the probability of a war is sure to act as another complicated variable. The scope and duration of military actions to be taken by the United States are certain to affect the flow of funds and goods around the world. The past and imminent events surrounding the terrorist attacks more than likely came as perfect excuses for delaying the final decision on Hynix, especially amid mounting disagreement among creditor banks on the cash assistance proposal.

But the delay should not lead to an indefinite indecision on the matter of the troubled company. No matter how devastating the attacks were, they do not change the fact that Hynix is deeply troubled and its problems are ongoing. It is financially incapable of paying back maturing debts and is rapidly losing its ability to compete in the market in terms of productivity and physical equipment. The fact that erasing trillions of won in debt and extending the maturities on hundreds of billions more in loans are not enough without 500 billion won or more in cash assistance shows the magnitude and urgency of the problems facing Hynix. One thing that is absolutely clear is that time will not take care of Hynix's trouble. We once again urge a resolute and timely decision on the part of the creditors.