SEOUL, KOREA - Pantech, Korea's third-largest mobile handset manufacturer after Samsung and LG, will finally file for workout after weeks of desperate calls for help to the government and mobile service operators. A Pantech official said on August 8, "We have no way of paying back the 22-billion-won debt coming due on the 10th and had to apply for court receivership. By the next week at the latest we will file for the receivership."

 

As late as the end of July, the company had glimmers of hope as its creditors agreed on the resumption of the handset maker's workout program. But it was unable to withstand the pressure from the crushing debt estimated at 65 billion won including 43 billion won in unpaid accounts payable.

 

Earlier on August 5, Pantech's suppliers had sent a letter to the President asking for help as the 550 partner firms, as well as their 80,000 employees, would be out of business unless Pantech gets financial support from the government. 

 

In late July, the the three mobile operators, including SK Telecom, KT, and LG U+, to which Pantech owes 180 billion won agreed to extend the grace period for debt repayment two more years instead of agreeing to a debt-to-equity swap, effectively rescuing Pantech from the brink of court receivership. But they declined to take the additional delivery of mobile phones for reasons that they still have too much inventory. But Pantech and its suppliers insisted that the three mobile service operators immediately take the delivery of 13,000 new phones worth 90 billion won (US$87.4 million) because without it there would be no point for workout.