It appears that efforts to keep ailing South Korean handset maker Pantech afloat have failed, with reports in the local press that the company has now filed for court receivership.
According to The Korea Herald, it said in a statement: “We want to deeply apologise for failing to fulfill the responsibility and role as a company, which resulted in applying for court receivership.”
While the company had been on the receiving end of some leeway from its creditors, its ongoing viability depended on a commitment by operators to buy more new devices – even though they were already sitting on Pantech inventory.
The company faces tough competition from domestic rival Samsung and LG Electronics and, according to The Wall Street Journal, was particularly impacted when a government investigation into handset subsidies led to a ban on smartphone sales earlier this year.
It had been suggested that Pantech, which offers some devices in the US as well as its home market, may end up as the target of an acquisition, but contrastingly its small market share and precarious financial position has meant that suitors have not been queuing around the block.
But the court is also likely to see benefit in keeping the company alive, because its “going concern” value is significantly higher than the sum of its parts, and the success of numerous suppliers in South Korea also hinge on its continued existence.