Handset Maker Pantech Files for Bankruptcy

by San Antonio Attorney

Korean OEM Pantech has filed for bankruptcy today. The company stated almost $1 billion in debt, which is nearly twice the worth of the Pantech’s assets. It had failed to pay its receivables and salaries of employees last month.

Pantech is the third biggest smartphone producer in Korea following LG and Samsung but its product has not received much grip in the United States marker. In Korea, the company sells high-end smarthphones like the Vega Iron. In the U.S., Pantech sells mid-tier segment of smartphone such as the Discover. In addition to the lukewarm traction in the U.S., it has lagging sales in the Korean market. Local carriers have said there are up to 500,000 unsold Pantech phones.

Both Qualcomm and Samsung own stakes in the troubled OEM and supposedly both of them are planning to take out their shares. Last year, Samsung put in $51 million for a substantial stake in Pantech but this time even Samsung is experiencing the impact from high smartphone penetration and growing rivals from manufacturers of low-cost Android devices.

According to The Korea Times, many foreign smartphone producers such as China’s Lenovo and India’s Micromax were interested to acquire Pantech, but no agreement was made amid worries about the Korean manufacturer’s volatile financial standing and share of the market.

Pantech gave an official statement sharing its corporate rehabilitation plans to retailers and three mobile carriers.

Bankruptcy allows a business to reorganize while it continues to operate. However, it must propose a detailed plan of its restructuring and get the bankruptcy court’s approval. If not, the company will have to face liquidation.

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