The company's sales units in Europe, Taiwan and Japan are not part of the Chapter 11 filing, according to reports. MagnaChip has assets up to $50 million, but it also estimated liabilities of more than $1 billion.Looks like being stuck with a foundry that only allowed 1 megapixel cell phone CMOS and several hundred turns of leverage was not the recipe for success that CVC thought it was. Oh well - here is hoping that KTB knows how to run the business now that it has been stripped of all that bad, bad debt.
At the same time, a fund led by South Korea's KTB Securities Co. Ltd. has acquired MagnaChip and its affiliates, according to court documents. The deal is valued at about $80 million.
In 2004, the non-memory chip unit of Hynix was sold to a newly-created South Korean company formed by Citigroup Venture Capital Equity Partners L.P., CVC Asia Pacific Ltd. and Francisco Partners.
The new company, MagnaChip, inherited three main business lines from Hynix, including CMOS image sensors, LCD drivers and foundry services. In 2005, MagnaChip's sales were $937.7 million, a 13.6 percent decrease over 2004. It also showed a loss of $100.9 million in 2005.
Other chip makers that recently went the way of the dodo include Qimonda AG and Spansion Inc., both of which Zero Hedge has written about in the past. Anyway, this will only reinvigorate the short squeeze for tall the other fab companies, so it is likley very prudent to throw all your money in a company that directly competes with any of the abovementioned three as the ensuing price war will likely have a tremendously (good/bad - pick one, the market doesn't care) impact on the stock you invest it. Sphere: Related Content
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