Ailing South Korean device maker Pantech is reported to have filed for bankruptcy protection in the US, as it undergoes a restructure at home – with hopes that it may be acquired.
According to Bloomberg, the company said it has debts of $1 billion, compared with assets of $500 million. While Pantech is based in South Korea, its only significant overseas operation has been in the US, where it is now looking for protection from lawsuits as it reorganises at home.
Pantech said it had made the move as sales “dropped due to intensifying competition among mobile device manufacturers and market saturation since 2012, and the dramatic drop of domestic sales due to business suspension imposed by Korea Communications Commission to the mobile carriers in March 2014 led to significant strain on cash flow”.
The ailing device maker filed for receivership in South Korea in August 2014.
Although it has received some breathing space from creditors, its ongoing success depends on shipping more devices to operators. However, these operators are already sitting on Pantech inventory, and the country’s smartphone space is also in the midst of significant transformation, meaning there is little appetite to commit to more.