Pantech to merge with Pantech&Curitel Communications

By Nam Kwang-sik
SEOUL., Oct. 15 (Yonhap) -- Pantech Co., a South Korean handset maker, said
Thursday it will merge with affiliate Pantech&Curitel Communications Inc. to
sharpen its competitive edge in the global market.
The decision is subject to approval by a shareholders's meeting scheduled for
Nov. 27, Pantech said in a regulatory filing. If approved, the merged entity,
named Pantech, will be launched on Dec. 30.
"Pantech is aiming to post 5 trillion won (US$4.3 billion) in sales and to sell
25 million units in 2013 after the merger," Park Byung-yeop, chief executive of
Pantech, said in a news conference.
Pantech and Pantech&Curitel Communications have been under a debt rescheduling
program since they were bailed out by the state-run Korea Development Bank (KDB)
with 1.28 trillion won in 2007. The program is scheduled to be completed at the
end of 2011.
In mid August, the two firms' creditors agreed to convert debts worth 220 billion
won into equity.
KDB, the main creditor of the local handset makers, holds 19.52 percent stake in
Pantech and 11.32 percent interest in Pantech&Curitel.
Founded in 1991 as a start-up manufacturer of pagers, Pantech was once hailed as
a model for venture businesses. But it began to face difficulties in 2006 after
expanding on borrowed funds and acquiring a handset-making unit from SK Telecom
Co., the country's top wireless company.
Pantech, together with Pantech&Curitel, is South Korea's third-largest mobile
phone manufacturer after Samsung Electronics Co. and LG Electronics Inc.
ksnam@yna.co.kr
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