Seoul, Korea, April 30, 2002
The Board of Directors (BOD) of Hynix Semiconductor Inc. has thoroughly reviewed the MOU signed with Micron on April 19, 2002; the validity and practicality of the April 29, 2002 resolution of Hynix’s creditors for the restructuring plan of Hynix’s remaining non-memory business; and the possibility of normalizing Hynix in the event that the merger talks with Micron break down.
We have reached the conclusion that there are too many problems with the creditors’ post-merger restructuring plan for the remaining company. The plan overestimates the value of the Micron stock to be paid for the sale of Hynix’s memory business; unrealistically presumes the size and timing of contingent liabilities; and is too optimistic in its estimate of the cash flow of the remaining company. In addition, we have confirmed that, after its careful examination of the restructuring plan, Micron has also expressed concern to Hynix and its creditors regarding the viability of the remaining company.
This concern is based on the restructuring plan placing too much liability onto the remaining company; restricting the sales of the stock of the remaining company as a collateral security; and overestimating the revenue and cash flow of the remaining company. We are confident that with the upturn in the semiconductor industry and new developments in our technology, our business competitiveness has improved and, therefore, we have concluded that it is possible for Hynix to successfully exist as an independent entity.
Given the information available, the situation of the Company and our study of the various solutions, we have made a unanimous decision that the sale of Hynix’s memory business may be a meaningful option in and of itself, but it is not the best option for the interested parties, including the Company, its shareholders, its employees and its creditors, as the viability of the remaining company will be more uncertain under the restructuring plan than in the case of Hynix standing alone.
We, the Board of Directors of Hynix Semiconductor Inc., have engaged in serious and thorough discussions in reaching the above conclusion to reject the MOU. Moving forward, we will continue to make every effort to normalize the future business management of Hynix. We truly appreciate the genuine and sincere efforts of Micron’s employees and officers during the course of these negotiations, and we look forward to maintaining a cooperative relationship with Micron for the betterment of the entire semiconductor industry.
