By Callum Tennent on 11:19, 3 Jul 2014 inGeneralLatestNewsPhones

Pantech - logo

When discussing the booming Korean smartphone market, the names you’ll most likely immediately think of will be Samsung and LG. This could well be a large contributing factor to a rather serious matter at hand: Pantech is set to declare bankruptcy.

Pantech, if you perhaps rather understandably didn’t know, is Korea’s third-largest smartphone manufacturer. It also happens to have accrued debts of over ₩480 billion – that’s roughly £277 million. The company filed to restructure its debts for a second time back in February, but it was set a deadline of July 4th to repay its creditors. This repayment will almost certainly not happen, with Pantech registering operating losses of roughly £3.8m in the first quarter of 2014 alone.

The three main source with which Pantech’s debt lie are an assortment of financial institutions, investment banks, and network operators. The financial institutions and investment banks have agreed to exchange the ~£173.5m owed to them for equity, but the network operators aren’t so willing to settle. Korea’s three largest networks, SK Telecom, KT and LG Uplus are all undecided on what their course of action will be.

This is understandable on their part, as SK, KT and LG are owed £52m, £26m and £26m respectively. If they decide to hold out for the money, Pantech would be forced to declare bankruptcy.

Should that happen, there are two possible outcomes: Either Pantech as we know it folds, leaving the Korean marketplace in the vice-grip of a Samsung/LG duopoly, or a foreign tech company comes in and acquires Pantech. China’s Huawei, India’s Micromax or Japan’s Kyocera could all be potential buyers, with the benefits of expanding into the lucrative, tech-mad Korea market possibly too great to resist.

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TagsBusinessKoreamanufacturersPantechsmartphones

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