The creditors’ committee for bankrupt South Korean chipmaker MagnaChip Semiconductor LLC has won court approval for its plan to reorganize the company.
US Bankruptcy Judge Peter Walsh approved the plan on Friday after creditors modified it to boost the amount given to Korea Exchange Bank, MagnaChip’s lender.
“The amended plan substantially improved” the lender’s recovery, Joshua Fried, a MagnaChip attorney, told Walsh in Wilmington, Delaware.
MagnaChip said it would withdraw its plan to liquidate once the creditors’ proposal is implemented. The company said it decided not to seek approval of its liquidation plan because the lender supported the creditors’ committee.
“The treatment of creditors’ claims has vastly improved,” John Sherwood, a lawyer for the committee, told Walsh. The plan will create “a company on a restructured basis that is very strong” and has “a bright future.”
The plan was “overwhelmingly accepted” by creditors entitled to vote on it, Sherwood said. The lender will get 35 percent of the US$95 million it is owed in cash and a new term loan of as much as US$61.8 million to satisfy its claims, according to court documents.
Noteholders owed about US$500 million will share 5 percent of the reorganized company’s stock and the right to buy as much as 84 percent in an offering, according to court documents. A unit of Avenue Capital Management II LP, the largest noteholder, will act as the “backstop purchaser” and buy at least 67 percent. The equity offering was increased by US$10 million to US$35 million, Sherwood said.
“The new equity investment and plan to reorganization is a reflection of our competitiveness and growth potential,” MagnaChip chief executive officer Sang Park said in a statement released in Seoul yesterday. “There has been heightened interest in MagnaChip as business conditions improve and as the overall economy recovers.”
Unsecured creditors will get a “gift” of as much as US$324,000 from the noteholders, for a recovery of 10 percent of their claims, court papers show. Subordinated noteholders, owed US$250 million, will get 1 percent of the reorganized equity and warrants to buy 5 percent more.
MagnaChip and five affiliates sought bankruptcy protection in June, listing assets of US$425 million and debt of US$1.04 billion as of Dec. 31. The company’s sales units in Taiwan, Europe and Japan, and its South Korean sales and production operations, are not involved in the bankruptcy.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) would not produce its most advanced technologies in the US next year, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the comment during an appearance at the legislature, hours after the chipmaker announced that it would invest an additional US$100 billion to expand its manufacturing operations in the US. Asked by Taiwan People’s Party Legislator-at-large Chang Chi-kai (張啟楷) if TSMC would allow its most advanced technologies, the yet-to-be-released 2-nanometer and 1.6-nanometer processes, to go to the US in the near term, Kuo denied it. TSMC recently opened its first US factory, which produces 4-nanometer
GREAT SUCCESS: Republican Senator Todd Young expressed surprise at Trump’s comments and said he expects the administration to keep the program running US lawmakers who helped secure billions of dollars in subsidies for domestic semiconductor manufacturing rejected US President Donald Trump’s call to revoke the 2022 CHIPS and Science Act, signaling that any repeal effort in the US Congress would fall short. US Senate Minority Leader Chuck Schumer, who negotiated the law, on Wednesday said that Trump’s demand would fail, while a top Republican proponent, US Senator Todd Young, expressed surprise at the president’s comments and said he expects the administration to keep the program running. The CHIPS Act is “essential for America leading the world in tech, leading the world in AI [artificial
REACTIONS: While most analysts were positive about TSMC’s investment, one said the US expansion could disrupt the company’s supply-demand balance Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) new US$100 billion investment in the US would exert a positive effect on the chipmaker’s revenue in the medium term on the back of booming artificial intelligence (AI) chip demand from US chip designers, an International Data Corp (IDC) analyst said yesterday. “This is good for TSMC in terms of business expansion, as its major clients for advanced chips are US chip designers,” IDC senior semiconductor research manager Galen Zeng (曾冠瑋) said by telephone yesterday. “Besides, those US companies all consider supply chain resilience a business imperative,” Zeng said. That meant local supply would
Servers that might contain artificial intelligence (AI)-powering Nvidia Corp chips shipped from the US to Singapore ended up in Malaysia, but their actual final destination remains a mystery, Singaporean Minister for Home Affairs and Law K Shanmugam said yesterday. The US is cracking down on exports of advanced semiconductors to China, seeking to retain a competitive edge over the technology. However, Bloomberg News reported in late January that US officials were probing whether Chinese AI firm DeepSeek (深度求索) bought advanced Nvidia semiconductors through third parties in Singapore, skirting Washington’s restrictions. Shanmugam said the route of the chips emerged in the course of an
RSS