December 12, 2006 11:55
Creditors of Pantech will seek a debt workout for the nation’s troubled no. 3 mobile phone maker. The company has grown big, posting W3 trillion (US$1=W926) in sales from a venture company established in 1991 with capital of W40 million.
Under a debt workout program, creditors of a company in financial trouble delay collecting debts or write them off to save the company from bankruptcy but require it to reduce its workforce and assets.
Pantech and its affiliate Curitel Communications said Monday they decided to ask creditors for a workout program to get back on track as soon as possible. Twelve creditors of the Pantech Group, including the main creditor Korea Development Bank and Woori Bank, agreed on Friday.
A KDB spokesman said creditors agreed to rescue the firm since it is a key exporter with globally recognized technologies. But he added it is uncertain whether non-bank creditors, who own corporate bonds and commercial papers, will agree to the proposal.
A workout program requires unanimous approval of creditors. KDB will write to the other creditors asking for their consent. If the workout offer is rejected, Pantech faces court receivership or bankruptcy.
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