Pantech’s partners ask telecoms to buy phonesPartner companies of cash-strapped smartphone maker Pantech appealed yesterday to the country’s three biggest mobile carriers to purchase the struggling smartphone maker’s products in a written statement that was also addressed to President Park Geun-hye.
Pantech, which is going through another corporate debt workout program and faces court receivership, cannot afford to pay its suppliers and contractors.
If the mobile carriers decline to purchase 130,000 new phones worth 90 billion won ($87.4 million) from Pantech, the company will not be able to pay its 20 billion won of bonds maturing this month and will face court receivership.
In the letter to the president and telecom companies, Pantech’s contractors said they will topple one after another if the three mobile carriers - SK Telecom, KT and LG U+ - do not purchase Pantech’s products by today.
“About 550 suppliers, contractors and partner companies of Pantech, which are severely pressed for payback of principal and interest, face foreclosure and have been forced to suspend credit cards from financial institutions,” said the Council of Pantech’s Partner Companies.
“All of these companies will topple one after another tomorrow and disappear due to the financial difficulties of one company.”
However, mobile carriers have not accepted the request to order more phones.
The three mobile carriers, which Pantech owes 180 billion won, agreed last month to extend the grace period for debt repayment two more years instead of agreeing to a debt-to-equity swap.
In order to become stable, Pantech must sell 200,000 mobile devices each month, but 500,000 of its products are already stocked at the three mobile carriers.
“We cannot go against the market only to help Pantech,” said a spokesman for a mobile carrier.
“We cannot go on purchasing handsets more than the customer demand. Also, since we agreed to extend the grace period, the creditor banks should now take measures such as capital injections.”
BY KIM JUNG-YOON [firstname.lastname@example.org]