Pantech employees to return 20% of wages to combat company debt

Employees and executives of Pantech, the third-largest handset maker of South Korea, are to return 20 percent of their wages from December to March as part of the company's effort to improve liquidity amid its debt problems and search for buyers.

At the company's request and instigation last week, employees agreed to returning 20 percent of wages to contribute to overcoming Pantech's current plight.

"It was a painful decision, but an essential step for us to normalise the company as soon as possible," a Pantech spokesman said.

Pantech went into court receivership in August, after failing to pay debts it owes to its creditors, including local telcos SK Telecom, KT, and LG Uplus and its subcontractors. Earlier in March, it filed for debt workout due to its falling liquidity.

But later in November, South Korean accounting firm Samjong KPMG, organiser of Pantech's sales process, announced that no bids were received to acquire the Seoul-based smartphone maker.

The spokesman said it will decide later on whether to ask for return of wages after March.

According to Pantech's creditors, the company's going concern value was 382.4 billion won ($372.8 million), higher than its liquidating value of 189.5 billion won ($184.6 million), making it strongly likely that Samjong and the court will continue to work to find a buyer.

Pantech is also admired by the Korean public at large for being a startup, founded in the mid-1990s, that challenged the likes of conglomerates Samsung and LG.

Morale is at an all-time low at the company.

"Most employees are finding better jobs than Pantech right now, and we are tired of staying here," a Pantech employee at the company's smartphone development team told ZDNet Korea.

According to Pantech, more than half of the company's employees are on paid vacation.

Source: ZDNet.co.kr

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