Qualcomm Takes Stake in Handset Manufacturer in Lieu of Debt

Qualcomm has agreed to convert debt owed to it by Korean handset manufacturer into equity in the company. Under the terms of the agreement, Qualcomm will become a minority shareholder in each of Pantech & Curitel Communications and Pantech as a result of such conversion. Qualcomm will hold no more than 15 percent of the outstanding common shares of each company and will be a passive investor with no participation on the board or management of the companies.

Such debt-to-equity conversion is part of a restructuring of Pantech's outstanding debt into equity with many of its creditors. Park, Byeong-yeop, vice-chairman of Pantech, will continue to lead the management of the company and Mr. Park stated that Qualcomm's and other creditors' participation in the restructuring of the company:

"Pantech has enjoyed a long-standing relationship with Qualcomm and benefited from working closely with the Company, including using Qualcomm's leading technologies, components, software and technical support. Pantech appreciates Qualcomm's financial investment in our future under the deep trust between executive members of the two companies." said Yulmo Yang, spokesperson for Pantech.

He also added, "Our strong design team, new focus on innovation and unique product offerings has, and will continue to, re-establish the company's corporate identity as a prestigious and influential player in this industry."

Despite the recession in the handset market, Pantech has been in the black for eight consecutive quarters since April 2007 when the company put under workout, and the company gets its finance in order due to stabilization of financial system.

Posted to the site on 18th August 2009