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No buyers for debt-ridden South Korean handset maker Pantech

The first attempt to auction off the debt-ridden South Korean phone maker Pantech has failed, as no buyers applied.

According to South Korean accounting firm Samjeong KPMG, organiser of Pantech's sales process, no company submitted a bid to acquire South Korea's third-largest handset maker.

pantech
Image: Pantech

The Seoul Central District Court, which oversees Pantech's court receivership, must now decide whether to resume the bidding process or pay the company's debt.

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.

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 the court will lean towards opening another auction.

It was initially thought by market watchers that Chinese and Indian handset makers — including India's Micromax — would file for the bid, as they've sent notices to Samjeong that they were interested in acquiring the company, Pantech spokespeople said.

A Samjeong spokesman said that although the initial public auction failed, it was a situation that it anticipated, and it said that it will likely open another, this time a closed, auction, and set a new deadline or have individual negotiations with potential buyers.

Pantech had a market share of around 10 percent in the first half of the year. However, it has since been knocked off, due to bullish competition from Samsung and LG's new devices, and telcos' refusal to accept new stocks of phones due to an already full inventory.

However, telcos have this month begun to accept Pantech's phablet, the Vega Pop-up Note. More than 60,000 orders of Pantech's new smartphone were registered to SK Telecom, the only telco provider of the Note.

Pantech is hoping the new smartphone model can appeal to local customers, because it only costs 352,000 won ($316.29) in South Korea, about 600,000 won ($539.13) cheaper than Samsung's Galaxy Note 4.

Source: ZDNet.co.kr