Pantech again up for open bidding as U.S. purchase fails

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Pantech again up for open bidding as U.S. purchase fails

The country’s smallest smartphone vendor, Pantech, will be put up for open bidding for a third time after a previous attempt to sell the company to an American consortium foundered last week, according to Samjong KPMG and KDB Daewoo Securities, the organizers of the deal.

The flagging handset producer, best known for its Vega smartphones, was on the verge of being purchased by a U.S.-based consortium led by equity investor One Value Asset Management, but the deal was ditched on Wednesday after the potential buyer failed to remit the payment on time.

Pantech’s sales managers published a statement on the handset maker’s home page on Monday saying that they will accept letters of intent from potential bidders until 3 p.m. on April 17. The upcoming bidding is likely to be the last chance for the tech company, which is currently under its second court receivership in the past two years, to be saved.

Should the latest attempt fail, the Seoul Central District Court is expected to begin liquidation procedures, according to experts.

Samjong KPMG estimates that Pantech’s standing value is 110 billion won ($91 million), smaller than the estimated liquidation value of 150.5 billion won.

With more than 1 trillion won in debt, Pantech entered its second court receivership in August. The company, established in 1991, wrapped up a five-year debt rescheduling program at the end of 2011.

On Sept. 25, the Seoul Central District Court announced that the company was up for sale but that no entity had placed a bid to buy the debt-saddled smartphone producer by the Nov. 21 deadline amid concerns that the global smartphone market had hit a saturation point.

One Value Asset Management submitted a letter of intent on Feb. 17. Until late last month, the equity investor appeared intent on acquiring Pantech.

It sent press releases to the Korean media and went so far as to introduce post-acquisition strategies, which included expansion in the Chinese market and guaranteed job security for current employees. It promised to wrap up the deal after the Lunar New Year.

However, the American investor postponed transferring payment, citing a regulation in the United States that forces any company to report to the federal tax office when remitting $50,000 or more overseas.

Insiders say One Value either failed to secure the 110 billion won purchasing fee for Pantech or felt burdened by having to inject up to 50 billion won in additional spending for post-acquisition operations.

BY SEO JI-EUN [seo.jieun@joongang.co.kr]

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