Last Hynix bidder, SK Telecom, completes buyout

Korean semiconductor giant Hynix has had a 21 percent stake carved out of it and claimed by SK Telecom, which has today completed its acquisition for 3.4 trillion won, or $3.021 billion.

The Hynix stake is by far SK’s largest acquisition. SK is planning to invest 4.2 trillion won, or $3.73 billion, into facilities for the company.

That has let Hynix raise 2.3 trillion won, or $2.043 billion in capital through shares to SK Telecom. Ratings agency Standard & Poor’s has brought Hynix’s long-term corporate credit rating and unsecured debt ratings from BB- to B+, which it puts down to its renewed financial flexibility. 

S&P also took Hynix off its CreditWatch list because it thinks its long-term credit rating now appears stable. At the same time, it took SK Telecom’s rating down to A-, but overall, the companies are looking sturdy. Hynix is certainly looking sturdier.

SK Group chairman Chey Tae-won has been promoted to inside director of the company, while SK Telecom president Ha Sung-min and VP Park Sung-wook have also joined the board. Chey is expected, reports the Korea Herald, to either become head of the board or co-CEO at Hynix.

In a statement, Ha Sung-min at SK Telecom said that the new plan is to bring chip manufacturing and telecoms closer together. SK wants to take advantage of the troubled memory chip sector, reports Yonhap, and wants to boost its competition on a global scale. 

There are worries in Korea that SK chairman Chey Tae-won isn’t the best man for the job as he was recently up against embezzlement allegations.

Hynix has not had it easy over the last year or so. Profits for the world’s second largest memory chipmaker were worrying shareholders and the board. Perhaps more importantly, its performance was scaring off interested parties in an auction where it had a hard time convincing anyone that taking a stake in the company was worthwhile. Potential investors began dropping like flies – until SK Telecom was the only bidder left.