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(4th LD) Hyundai Heavy says it will not bid for Hynix
SEOUL, July 6 (Yonhap) -- STX Group, a South Korean shipping and shipbuilding conglomerate, said Wednesday that it has an interest in bidding for a 15 percent stake in Hynix Semiconductor Inc. as part of efforts to diversify its business.

   Creditors of the world's second-largest computer memory chip maker plan to invite preliminary bids for Hynix Semiconductor by Friday, with an aim to select a preferred bidder in August.

   "The group is considering submitting a letter of intent to buy Hynix and conducting due diligence. But if the results do not meet our expectation, we would not join a final bidding," said an official at STX Group.

   "But if the outcome of due diligence is satisfactory, we will seek to purchase the chipmaker by creating a consortium with a sovereign wealth fund in the Middle East," he added.

   STX Group, the nation's 12th-largest conglomerate, has been aggressive in taking over companies as part of its expansion. The group's assets reached 32 trillion won (US$30 billion) as of the end of 2010.

   STX Group's plan came after Hyundai Heavy Industries Co., previously deemed the sole potential bidder, said earlier in the day that it will not bid for Hynix, raising speculation that creditors may fail again to sell the chipmaker.

   SK Group and its holding company SK Holdings Co. also said they have not decided on whether to bid for the stake of the chipmaker, leaving open a possibility that they may join the bidding.

   The race to sell Hynix Semiconductor has been complicated as other local conglomerates, including LG Group, Hyosung Group and Dongbu Group, have not shown interests in bidding for the chipmaker.

   Against this backdrop, Hyundai Heavy Industries was regarded as the sole potential bidder amid speculation that the shipbuilder, awash with cash, is determined to take over Hynix.

   Also, the shipbuilder has been diversifying its business portfolio to reduce its heavy dependence on the shipbuilding business.

   Shares of Hyundai Heavy closed at 484,000 won on the Seoul bourse, up 6.37 percent from the previous session. Hynix, however, tumbled 5.36 percent to end at 26,500 won.

   The creditors' previous attempts to sell Hynix Semiconductor hit a snag as volatile business conditions for the chipmaking sector and huge investments have made potential investors wary of buying the company.

   In February, the creditors invited bids for the stake but failed to attract any bidders. In November 2009, Hyosung Corp., the sole bidder in the first sale attempt, dropped its bid for the stake on market speculation that it received political favors to pursue the takeover.

   Korea Exchange Bank is the biggest shareholder of Hynix with a 3.42 percent stake, followed by Woori Bank with 3.34 percent and state policy lender Korea Finance Corp. with 2.58 percent.

   The creditors injected $4.6 billion to rescue the chipmaker by swapping their debt holdings into shares in 2001 and 2002.

   In the first quarter, the company's earnings tumbled 66.2 percent on-year as weak PC demand battered chip prices.