Hyundai Heavy says it will not bid for Hynix

(ATTN: UPDATES share price in 3rd para; ADDS more details from 4th para) SEOUL, July 6 (Yonhap) -- Hyundai Heavy Industries Co., the world's leading shipbuilder, said Wednesday it will not bid for a stake in Hynix Semiconductor Inc., the world's No. 2 computer memory chipmaker. Hyundai Heavy has been regarded as the sole potential investor for the 15 percent stake up for sale. Shares of Hyundai Heavy were trading at 485,000 won on the Seoul bourse as of 9:30 a.m., up 6.6 percent from the previous session. Hynix, however, tumbled more than 6 percent. "We decided not to submit a bid for Hynix Semiconductor," the company said in a regulatory filing. There has been growing speculation that the shipbuilder, awash with cash, is determined to take over Hynix as other local groups such as LG and SK are not showing interest in the chipmaker. Also, the shipbuilder has been diversifying its business portfolio to reduce its heavy dependence on the shipbuilding business. Creditors of Hynix Semiconductor, led by Korea Exchange Bank (KEB), are seeking to sell the stake in the chipmaker with the aim of selecting a preferred bidder in August and wrapping up the sale by the end of the year. The creditors earlier said they will accept preliminary bids by Friday. The creditors' previous attempt 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. KEB 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.