On Thursday, the Financial Supervisory Service rejected Hynix's appeal to lower the stock repurchase price to 9,561 won (8.2 dollars) a share from a previous offer price of 11,376 won to buy back shares from stockholders who are opposed to the asset sale.

The stock buyback plan is necessary to complete the sale of Hynix's non-memory unit to a venture capital unit of the US-based financial services giant.

"Although the share buyback exceeds our expectation of 40 billion wonmillion dollars), we will proceed to conclude the sale, a key part of our business restructuring plan. But the deal is expected to be delayed," Hynix said in a statement.

While rejecting Hynix' request, the financial watchdog said that Hynix failed to alert shareholders in time to the price adjustment.

According to Hynix, shareholders representing about 17.6 million shares, or 3.9 percent of the company's total outstanding stock, filed for the repurchase.

Under the terms of the original agreement with Citigroup, if the repurchase request exceeded 40 billion won, the parties in question would discuss how to shoulder the cost. Failure to reach an agreement could derail the deal itself.

The world's third-largest memory chip maker has signed a deal with Citigroup Venture Capital to sell its non-memory operations for 954 billion won (822 million dollars).

Hynix said the proceeds would be used to repay debts and fund new operations.

The deal, the biggest sale of assets since Hynix launched a sweeping restructuring program two years ago, is expected to help the South Korean firm focus more on its core memory chip business, reduce its debt and boost investment needed to recover its competitiveness.

Creditors last year rescued Hynix from near bankruptcy with a 3.2 trillion won bailout package, giving them control of the company.

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