Pantech Selloff
Pantech, which filed for court receivership, announced the disposal of its business on Sept. 24.
As the Seoul Central District Court recently approved an application form to announce the sale of Pantech, Samjong KPMG, which is in charge of the sale, put an announcement to sell Pantech in daily newspapers and on Pantech's home page on Sept. 24. The disposal of the company will be done by attracting outside capital through a paid-in capital increase by way of third-party allotment and the issuance of corporate bonds.
According to due diligence conducted by creditor banks, the going-concern value of the debt-ridden company is 382.4 billion won (US$366.1 million), with a liquidation value of more than 189.5 billion won (US$181.4 million). As a result, the amount of the sale is likely to be bigger than the liquidation value, stemming from Pantech's incalculable technical skills.
Once the disposal of Pantech is announced, overseas companies are expected to be more interested in acquiring the handset maker than local firms. T is due to the fact that local firms are struggling in the already-saturated local market. In contrast, overseas companies, which have distribution networks abroad, could enjoy synergistic effects of the M&A deal.
In particular, Indian handset maker Micromax is likely to show its interest in the disposal of the troubled company, since in April it indicated its intention to buy an ownership stake in Pantech, which was placed under a debt-workout program at that time.