No Hynix bidders yet; block sale an option: agency

SEOUL (Reuters) - Hynix Semiconductor Inc (000660.KS) has drawn no bidders yet for a controlling stake in the world's No. 2 memory chip maker, ahead of a January 29 deadline for letters of intent, a state agency and major shareholder said.

Creditors-turned-shareholders led by Korea Exchange Bank (004940.KS) are putting up for sale their combined 28 percent stake in Hynix, after a first sale attempt failed late last year. The stake on offer is worth 4 trillion won ($3.4 billion) at market prices.

Ryu Jae-han, who heads the state-run Korea Finance Corp, told reporters that the shareholders would consider other measures to offload the stake if the second auction fell through, including a block sale.

His remarks were made in a news conference late on Wednesday and embargoed until Thursday morning.

The shareholders are proposing flexibility on the size of the stake to be sold and funding, with an aim to pick a buyer in the first half of this year.

The auction is targeting domestic companies, as in the previous round, but Ryu said that a door had been left open to foreign investors to participate as financial sponsors of a domestic strategic buyer.

Hynix is at the top of the government's 2010 sale list, which includes stakes in Daewoo International Corp (047050.KS) and Woori Finance Holdings (053000.KS), as it tries to narrow a fiscal deficit.

Shares in Hynix rose 2.4 percent to 23,800 won as of 0016 GMT (7:16 p.m. on Wednesday) after sliding to near a one-month low on Wednesday. The wider market .KS11 edged up 0.2 percent.

After surviving a downturn through share and asset sales as well as new loans, Hynix, which competes with bigger home rival Samsung Electronics (005930.KS) and Japan's Elpida Memory 6665.T, is facing a strong 2010 riding on a sector recovery.

The highly cyclical nature of the memory chip industry and heavy investment requirements have limited investor appetite for Hynix.

($1=1161.3 Won)

(Reporting by Lee Eun-yul and Kim Yeon-hee; Editing by Jonathan Hopfner)