SK Hynix Inc., the world’s second-largest memory chipmaker, said on Monday it would raise $1.5 billion through exchangeable bonds (EBs) in a preemptive effort to secure funding before market liquidity dries up.
The bonds with seven years' maturity will be issued at 111,180 won ($84.6) apiece on April 11, above its shares' closing price of 87,200 won on Monday.
They can be exchanged into 17.76 million treasury shares from May 22, representing a 2.4% stake in SK Hynix, according to its regulatory filing.
The proceeds will likely be used to build new facilities, buy components and pay its employees.
That means it still needs several billions of dollars as capital expenditures this year.
Further, SK Hynix executives had said the company was experiencing a cashflow squeeze after incurring 600 billion won in one-off charges related to the worsened NAND business at its two overseas invested firms – Japan’s Kioxia and San Jose-based Solidigm.