updated 10:46 am EST, Wed February 26, 2014
Move follows six months of severe austerity programs
Beleaguered Korean electronics manufacturer Pantech is seeking help to restructure and modify its debt. The company contacted its creditors earlier this week, hoping that it can either stop or slow its payments and keep the company alive, even after a year that saw Qualcomm and Samsung each buy 10 percent of the company.
Pantech is Korea's third-largest cellphone manufacturer. After success after the turn of the century, Pantech contracted and is currently only marketing its products in Korea, but AT&T and Verizon still carry products in the US.
"Creditors are going to review the possibility of putting it under a debt-restructuring program next week," an official at the Korea Development Bank told the Wall Street Journal. "Should there be an agreement among creditors, the company will undergo due diligence for about two to three months, after which we will work to put together a normalization plan in discussion with the company."
The company has posted five straight unprofitable quarters, and is $1.14 billion in debt. The company holds $964 million in assets in total. Seeing the growth in debt, the company furloughed 30 percent of its employees for six months in September. Most other employees still on the job saw significant pay cuts.
If approved, this would be Pantech's second debt restructuring. The first took place in 2007 under business pressure from Samsung and LG.