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South Korean Handset Manufacturer, Pantech Seeks Debt Restructuring

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South Korean handset manufacturer, Pantech has again filed for debt restructuring with its largest creditor in the latest in a long line of attempts to turn the firm around.

Pantech said that it has applied for a debt workout with its main creditor, Korea Development Bank in order to work out a long term survival plan for the company.

The struggling handset manufacturer says that it took preemptive steps as it now lacks the necessary capital to remain competitive. The company last restructured its debts in April 2007.

The company has posted a string of losses in recent years, although it seems to have started making an operating profit in the past few months, excluding the cost of servicing its heavy debt burden.

Although the company is a small player in the local market now, a collapse of the firm could hurt the bigger players as it supports some 2,000 component suppliers who might struggle if they lose a small, but still significant customer.

Qualcomm and Samsung both took stakes in the firm last year in debt for equity swaps, and now own 10% and 12% respectively.

Last September, its founder, Park Byeong-yeop resigned after saying he was "too ashamed" to work for the company which had asked a third of its staff to take unpaid leave.

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Tags: pantech  Korea