Creditors approve debt relief for Hynix.

Byline: From Register-Guard and news service reports

SEOUL - Hynix Semiconductor, the troubled South Korean chip maker that has a 700-employee plant in Eugene, won another reprieve Monday as its creditors approved a $4 billion plan to keep the company alive.

The debt relief was approved despite opposition from some creditors, who said that their institutions would not advance more funds to the company.

Hynix was once a core member of the Hyundai conglomerate. Hynix operates about a half dozen chip plants in Korea, and the plant in Eugene. Creditors have already rescued Hynix twice in the past two years.

The latest rescue comes as Hynix Semiconductor stands accused by two rivals, Micron Technology of Boise and Infineon Technologies of Germany, of receiving unfair help from the Korean government in the past.

Hynix's creditors took over the company in June after the previous board rejected a proposal to sell most of Hynix, including the Eugene plant, to Micron for nearly $3 billion.

On Monday, still hoping to prepare Hynix for sale, the creditors, led by the government-controlled Korea Exchange Bank, rolled over $2.4 billion in debts to 2006 and agreed to exchange another $1.6 billion of debts for shares in Hynix. Hynix's overall liabilities have soared to more than $6 billion despite the two previous bailouts. Hynix remains the world's third-largest producer of memory chips behind Samsung Electronics of South Korea and Micron, and just ahead of Infineon.

Hwang Hak Joong, a vice president of Korea Exchange Bank, said Hynix's creditors said they believed that the latest exercise in debt restructuring would ``put creditors in a better position to eventually sell the company.''

Korea Exchange Bank as lead creditor won agreement for its deal from lenders holding a total of 86.5 percent of Hynix's $6.25 billion in acknowledged debts. The new plan provides no additional money for the research and development needed to keep pace in a fast-evolving field.

Analysts say fresh funds are crucial for Hynix to be able to invest in the technology needed to keep up with rivals such as Samsung and combat falling chip prices.

``Hynix's survival will depend on how much the company can invest on its technology next year,'' said Chin Yeong Hoon, an analyst at Daishin Economic Research Institute in Seoul.

``Given its situation, it won't be able to raise money for investment by itself as chip prices aren't doing well.''

Earlier this month, the U.S. International Trade Commission found that exports by South Korean chip makers, including Hynix, threatened Micron, a ruling that may lead to U.S. tariffs.