Moody's places Hynix Semiconductor on review for upgrade

HONG KONG, Nov. 15 (Yonhap) -- Moody's Investors Service said Tuesday it has placed the credit rating of Hynix Semiconductor Inc. under review for possible upgrade following SK Telecom Co.'s bid to buy a controlling stake in the company.

SK Telecom, South Korea's top mobile operator, said it will pay 3.43 trillion won (US$3.06 billion) for a 21.05 percent stake in the world's No. 2 memory chip manufacturer. Hynix also plans to issue 101.85 million new shares to SK Telecom for 23,000 won per share.

"The new shares will raise about 2.3 trillion won in capital, bolstering Hynix's equity base by 28 percent, according to the figures for September 2011," said Annalisa DiChiara, vice president and senior analyst at Moody's.

"While the application of the proceeds is still uncertain, we believe that this capital raising is positive for Hynix's credit profile as it provides additional financial flexibility."

Moody's expected Hynix's debt-to-capitalization ratio will significantly improve when the transaction materializes as planned, while Hynix could also benefit from SK Telecom's strong banking relationships and its ability to provide financial support.

The global credit rating appraiser said it plans to finish the review upon closing of the transaction, which is expected in early 2012.

Earlier in July, Moody's said its rating for Hynix will not be affected by the sale of the company's major stake, saying the creditors' plan to sell down the equity stake in the chipmaker had already been factored into the rating.