by Anton Shilov
10/01/2002 | 03:33 PM
No one wants to buy the memory business of Hynix, but since the company still needs the new funds badly, they have to sell their other subsidiaries.
Hynix Semiconductor announced that it had signed a preliminary agreement with BOE Technology Group regarding the sale of Hydis, the TFT-LCD business unit. Hynix will transfer tangible & intangible fixed assets, current assets, operating liabilities and the TFT-LCD factory building and related structures still owned by Hynix to BOE. The cash payment is US$380 million, of which amount may be increased upon a final due diligence of current assets and current liabilities. <%BANNER[article]%>
BOE manufactures computer peripheral devices including CRT and monitors, with its headquarter in Beijing, China. The company also acquired TN/STN LCD business of Hydis late last year jointly with Semicon Engineering.
It is now said that Hynix, Hydis and BOE are scheduled to sign a definitive agreement by October 25, 2002 and complete the business transaction by the end of November this year.
By completing this asset transfer and by selling the largest non-core business unit, Hynix will achieve pretty significant progress in the scheduled business-restructuring objective. The sale will also allow Hynix to concentrate on core business and bolster investment in next generation production facilities. On the other hand this sale of business will enable Hydis to further extend its TFT-LCD business by being linked to Chinese capital and the market. BOE also said that it is planning to foster TFT-LCD business as their core strategic business by acquiring technology and manufacturing and operating fundamentals of Hydis. Of course, a lot of things will be changed at Hydis, however, it is not something strange nowadays. Given that Hynix execution did not allow certain subsidiaries to become profitable enough, we definitely should expect Hydis to be totally restructured.
Unfortunately, $380 million are far from being enough to pay Hynix’s debts that equal to several billions. Expect the company to sell something else in future.