Hyundai family eyeing Hynix Semiconductor

Hyundai powerhouses are reportedly interested in acquiring the 15 percent stake in Hynix Semiconductor that will be put up for sale later this month, financial sources said on Sunday.

Among them, Hyundai Heavy Industries is seen as one of the most viable candidates, industry sources said.

The biggest motivation for the company is its undying desire to gather all the Hyundai affiliates under one roof again, along with the need to secure new growth engines.

Hynix had previously been a member of the Hyundai family as Hyundai Electronics. The company acquired LG’s semiconductor unit in 1999 before taking on the Hynix moniker in 2001.

Hyundai Heavy Industries has recently been quietly widening its reach over former Hyundai affiliates, starting in 2009 when it purchased Hyundai Corp., followed by Hyundai Oilbank.

“Hyundai Heavy was once a stakeholder in Hynix, and both were affiliates of Hyundai, which explains the company’s interest in the acquisition,” said one analyst here.

Hyundai Heavy Industries, whose main expertise is shipbuilding and construction equipment manufacturing, also needs to foster new industries that will secure sustainable growth.

Hyundai Heavy has recently been making forays into future-focused businesses, such as solar energy and smart grids.

Adding a semiconductor unit ― the world’s No. 2 memory-chip maker no less ― would fit into this bigger picture, noted.

The company is said to have enough cash, as its liquid assets reached 2.8 trillion won ($2.5 billion) as of the end of the first quarter of this year.

Industry experts including Kwon Oh-chul, CEO of Hynix Semiconductor, expects the 15 percent stake to cost at least 3 trillion won.

Additional investment into equipment and research and development of up to 2 trillion won also may be required as a memory chip business is known to be a cash-guzzling industry due to its constant need to make technological breakthroughs.

Hyundai Group is another Hyundai heavyweight hoping to add more Hyundai affiliates under its wing after losing to Hyundai Motor in a bid to snatch up Hyundai Engineering and Construction earlier this year.

Once seen as doomed for good, Hynix has rebuilt itself over the last 10 years.

Last year, its consolidated sales rose to a record 12.09 trillion won ($10.87 billion), up 53 percent from 2009 despite the price fall of two major memory chip classes ― DRAM and NAND Flash memory, its main products.

On Friday, Hynix shares ended at 26,700 won.

Creditors are now expecting to select a preferred bidder by September to sell off their combined stake in Hynix by the end of this year.

The sale will be made public on June 21 in aim to receive letters of intent by mid-July.

“We understand that many of the top 10 corporations in the nation have been in touch with the sales brokers,” said Ryu Jae-han, CEO of the Korea Finance Corp., one of the creditor-turned-stakeholder for Hynix.

But the creditors also are wracked with concerns, partly because the sale of Hynix has been over-advertised, and also because they want to wrap things up before 2012 when political events including the presidential race will steal the show.

By Kim Ji-hyun (jemmie@heraldcorp.com)