The three mobile carriers have refused to agree on a debt-for-equity swap worth 180 billion won (US$177 million) requested by the creditor banks of Pantech, which is currently under a debt-workout program. As a result, the handset maker is likely to file for court receivership, just 23 years after its foundation.
According to industry sources and creditors on July 8, nine creditor banks, including Korea Development Bank, requested that SK Telecom, KT, and LG U+ agree on a debt-for-equity swap valued at 180 billion won (US$177 million) by July 8, but they did not hear from carriers.
An official at a creditor bank said, “We extended the deadline for the agreement, but did not get any response from them.” The official added, “Since mobile carriers refused to agree on the debt-for-equity swap, we have no choice but to end debt restructuring.”
On June 13, creditor banks came up with a measure to swap 480 billion won (US$474 million) of debt with equities, and asked three carriers to make a decision on a debt-for-equity swap worth 180 billion won by July 4.
When creditors did not hear from carriers by July 4, they extended the deadline for the agreement to July 8. They also decided to maintain debt restructuring on the condition of mobile carriers' agreements on the debt-for-equity swap.
Now, creditor banks think that they cannot extend the deadline once again. One official at a creditor bank remarked, “Unless mobile carriers ask for the extension on the grounds of internal review, we are not planning to extend the deadline one more time.”