SEOUL, May 26 (Korea Bizwire) — Cash-strapped South Korea handset maker Pantech said Tuesday it has asked a local court to end its receivership as no viable investors sought to take over the once No. 2 handset maker in the country.
Pantech, which was put under court protection August last year, has been on the selling block, but rounds of bids to sell the handset maker fell through due to lack of viable investors.
If the Seoul Central District Court court accepts Pantech’s call, the handset maker will face liquidation.
“Despite our 10-month long efforts, we could not find an appropriate bidder with a right evaluation of Pantech,” the company said in a statement. “Being unable to take our duty and role as a company, we have decided to apply for the end of the normalization procedures.”
Following the application, the court will gather opinions from parties of interest for the next two weeks. If the court does not issue a liquidation order, Pantech will make efforts to find new investors by itself.
Once the liquidation order is issued, however, creditors of Pantech will share tangible and intellectual assets of the company according to related rules.
Pantech started out as a small pager manufacturer, but early success as a handset maker went under in 2007 as its debt increased and an acquisition of a local handset maker resulted in losses.
The company was rescued and put under a five-year debt rescheduling program in 2007. But its financial footing weakened again as it struggled with falling sales from increased competition in the smartphone market dominated by giants like Samsung Electronics and Apple.
In December 2011, it ended the debt rescheduling program, but a continued drop in sales led the firm to file for court receivership in August last year.