Pantech fails to secure a single bid
On Sept. 25, the Seoul Central District Court announced that the Korean smartphone maker was up for sale, but there were immediate concerns that Pantech might not find a new buyer because of saturation in the global smartphone market.
Although several overseas and Korean companies filed letters of intent (LOI) to acquire the phone maker, none placed a bid, according to Samjeong KPMG.
In addition, the 200 billion won ($179 million) that creditors were hoping to collect from the sale was considered too much.
Rumors spread that Chinese and Indian tech companies - including Huawei, Coolpad, ZTE, Xiaomi, Lenovo and Micromax - were likely to bid on the Korean smartphone company.
However, since the open bid failed, Pantech’s future is again in the hands of the court, which will decide whether to start the bankruptcy process or hold a rebid.
According to the local IT industry, it is likely that the court will choose to carry out a rebid because bankruptcy would have no substantial benefit to creditors and it would force the company into liquidation. The company has more than 1 trillion won of debt.
Some insiders predicted that in the event of a rebid, Pantech would be split into its constituent parts and sold separately, but the phone maker denied the possibility.
Another option for Pantech is to pursue a private contract with one of the companies that filed an LOI.
“As there was no buyer for Pantech, the company might go through restructuring and pursue a one-on-one private contract with a potential buyer,” said a spokesman for an investment bank.
Samjeong KPMG implied that it might help organize the private contract.
“We will discuss with the court whether to announce rebidding or to have negotiations with investors interested in Pantech first,” said a spokesman for Samjeong KPMG. “If no company shows interests during the rebid, the court will decide the next step.”
On the other hand, Pantech said the bid price might go down further and it will discuss the bid price with Samjeong KPMG and the court.
In the meantime, Pantech is still trying to stand on its own feet by launching new products and dropping prices of its older phones.
On Thursday, the debt-ridden smartphone maker launched the Vega Pop-Up Note for 352,000 won through SK Telecom. Consumers can get the phone for about 200,000 won with subsidies. The new phone’s special feature is a stylus that doubles as a DMB antenna.
The company is still looking to secure a stable revenue source through an innovative and affordable product.
The first 30,000 Vega Pop-Up Notes sold out in just one day.
BY KIM JUNG-YOON [firstname.lastname@example.org]
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