Korea’s Third Largest Handset Maker in Deep Trouble: Pantech Sinking in Debt and Insolvency
A few days ago we found out that third placed Korean handset maker was saved from bankruptcy at the last moment, but only by a hair thread. Creditors have agreed to extend Pantech’s deadline to pay its debts for an extra 2 years, keeping them afloat in the meantime.
They’re also lucky enough to get this deal without interest and they have till July 25th 2016 to pay up. The creditors are SK Telecom, KT and LG Uplus, the 3 major carriers in Korea. Pantech is a brand that focuses mostly on its local market, although it did debut a few interesting phones on Verizon in USA. Last month, the handset maker was supposed to pay back almost half a billion dollars in debt after facing huge losses in profit.
If Pantech wasn’t given an extension, this could have opened the window for foreign device makers to enter South Korea. Chinese companies would have been favourite to grab that third place following LG and Samsung. The problem that Pantech has right now is that it’s paralyzed by the debt, that stopped it from selling any phone ever since early July, that was the original deadline. They’re also facing a problem with unsold units, about 600k of them.
Will Pantech exist in fall 2016?