Pantech potentially saved from bankruptcy with last-minute buyer

South Korea's third-largest smartphone maker may make an unlikely comeback from facing bankruptcy after a potential buyer finally showed interest before a deadline.

Pantech, which has been in court receivership since August last year, has signed a memorandum of understanding with the Seoul Central District Court's approval for a possible merger and acquisition with a consortium led by South Korean optical disc drive (ODD) manufacturer Optis on June 16.

The two will begin a month-long cross-inspection, and will officially sign off on the acquisition on July 17, if no obstacle to the deal is found.

Pantech was facing liquidation by the court after three separate talks with potential buyers failed this year. The handset maker nearly gave up, and last month filed documents to the court stating that it wished to end the court receivership, which is similar to Chapter 11 in the US, and go through with liquidation. The deadline for a buyer was this week.

Fund managers and real estate companies have showed interest, but all talks fell through as they failed to meet the criteria given by the court.

Pantech insiders told ZDNet Korea they are more hopeful that the acquisition will be successful this time, as Optis is a well-known company in South Korea specializing in manufacturing.

Optis was formed by an ex-Samsung Electro-Mechanics CEO in 2005, and manufactures components for ODDs. It acquired its Philippines counterpart Sephil in 2012. Last year, it gained 49.9 percent share of Toshiba Samsung Storage Technology (TSST), an optical disk joint venture from Samsung and Toshiba. The company posted 599.9 billion won ($536 million) in revenue, and an operating profit of 15 billion won ($13 million) last year.

The consortium reportedly paid around $2 million as a deposit to the court. EMP Infra Asia, a hedge fund, is part of the consortium.

"Since an MOU has been signed between the two parties, we believe the possibility is high that it will go through," said a court spokesperson, stressing that the companies will still have to wait for next month's final signing off.

Pantech is the third-largest mover of smartphones in South Korea after Samsung and LG, but has struggled in recent years due to a lack of funds to compete in marketing against the two behemoths.

Source: ZDNet.co.kr

Newsletters

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
See All
See All