May 31 2007
Court Receivership for TFT-LCD manufacturing company BOE HYDIS has been approved placing the company on more solid footing to pursue recovery efforts and management normalization.
BOE HYDIS announced that its Corporate Rehabilitation Plan was approved by a review panel of the Seoul Central District 3rd Bankruptcy Court on May 31. The plan was part of the company’s application for Court Receivership and was approved with 90 percent of rehabilitation security holders and 97 percent of creditors in agreement.
The rehabilitation security is held by the Industrial Bank of Korea, Korea Exchange Bank, Woori Bank, Hyundai Fire & Marine Insurance Co., Ltd., and Hynix Semiconductor Co., Ltd., and various rehabilitation creditors including the Korea Federation of Community Credit Cooperatives and National Credit Union Federation of Korea.
As a condition of the Court Receivership, 100 percent of shares issued held by its largest shareholder, the BOE Technology Group, will be dissolved without compensation. The BOE Technology Group is considered responsible for the management failure of the company.
Due to deteriorating market conditions in the TFT-LCD sector and the company’s liquidity problems, BOE HYDIS filed for Court Receivership on Sept. 8, 2006. On Sept. 29, the company commenced its restructuring process. The 1st meeting of interested parties with Creditors was held on Jan. 19 of this year, followed by the 2nd and 3rd meeting of interested parties on April 19. Due to differing opinions among some of the creditors on repayment rate, the 3rd meeting of interested parties was reheld on May 31 where the creditor agreement was sufficient for BOE HYDIS to receive Court Receivership approval in eight months after the original filing.
With approval of Court Receivership, BOE HYDIS has secured its Corporate Rehabilitation procedure.
Haesung Park, the court-appointed supervising director of BOE HYDIS stated, “Although the company is currently under Court Receivership due to deteriorating profitability caused by oversupply, the plunging prices of TFT-LCD products, and the temporary liquidity problem, BOE HYDIS’ 20 years of accumulated technologies, most notably our in-house developed AFFS, in addition to our small to mid-sized product development competitiveness, strong cooperative relationships with strategic clients, and other supporting factors were recognized by the court and Court Receivership was approved. And now for rapid recovery and normalization of the company, we will aggressively seek out investors and pursue M&As.”
BOE HYDIS launched its operations as Hyundai Electronic’s LCD Business Division in 1989. In 2001, the company spun-off from Hyundai Electronics and established the corporate name HYDIS. It was then acquired by BOE Group of China and became today’s BOE HYDIS.