MagnaChip Semiconductor, maker of processors used in mobile phones, digital television and laptops, has filed for bankruptcy and has already lined up a South Korean private equity fund to buy its assets for $80 million, reports VentureWire.
The Sunnyvale, Calif., company took a dive late last year when the full weight of the economic downturn hit the discretionary television market, slashing sales of expensive liquid crystal displays. It had racked up more than $1 billion in debt with only $425 million in assets -- a bad situation by any measure. It has been looking for a buyer since December, but only just yesterday KTB Private Equity Fund stepped forward to buy MagnaChip's 4,700 patents and remaining inventory.
The company says it will use the money from the sale to pay back some of its lenders, who it owes $95 million. It will also give $1 million to noteholders, who are owed $500 million total. It is also the parent company to twelve others located throughout Asia. It says it will file a reorganization plan by the end of the month.
As a major supplier to companies like LP Display, Sharp and members of the Samsung Group, the company attracted many powerful creditors, including Bank of New York Mellon, which stands to lose $500 million in bondholder debt and $250 million in subordination debt, and O'Melveny & Myers, which invested $776.8 million.