After trying to avoid bankrupcy in recent weeks, Pantech has finally succumbed and filed for receivership. The smartphone maker filed its application to the Seoul Central District Court on 11:30 am, August 12 (KST).
Senior executives, including CEO Lee Jun-woo, held a board meeting at its headquarters in Seoul to approve the filing.
The court will now freeze all corporate debts and bonds of Pantech within a week, and decide whether to accept Pantech's proposal for a receivership.
If approved, it will commence an audit of the company to determine whether it will be more valuable to save or liquidate it.
According to Pantech's creditors, the company's going concern value was 382.4 billion won (US$372.8 million), higher than its liquidating value of 189.5 billion won (US$184.6 million), which increases the possibility that the court will accept the application and save the firm.
Pantech CEO Lee apologized to "related parties" for the filing but vowed to put in full efforts to save the firm from bankruptcy.
The fate of the handset maker, which is currently in a debt restructuring program overseen by its creditors, seemed to turn for the better when its creditors and local telcos — which it owes a total of 480 billion won (US$471 million) — agreed to suspend its debt for two years last month.
However, SK Telecom, KT, and LG Uplus refused to buy additional phones from Pantech that was needed for it to secure the cash to pay back the 50 billion won (US$48 million) it owes its suppliers.
Telcos said they already had too many of the company's phoned in their inventories to accept more.
As recently as May, Pantech claimed that the launch of its Vega Iron 2 handset would push the phone maker over the 15 percent mark in the Korean market.
In 2013, Samsung purchased a 10 percent stake in Pantech.
Source: ZDNet Korea (zdnet.co.kr)