Mobile phone chipmaker Qualcomm is expected to become a key stakeholder of Pentech, Korea's maker of well-designed SKY mobile handsets.

Pantech said Tuesday that it owes the U.S. chipmaker $76 million in unpaid royalties and that the two companies agreed to turn it into equity, making Qualcomm the second largest shareholder of the Korean mobile phone maker.

The debt-to-equity swap will come in two stages ― first for $47 million, then for the remainder.

This rearrangement will reduce the Korea Development Bank's stake by 2 percentage points to 13.87 percent, while Qualcomm will get 12.55 percent.

Qualcomm plans to possess no more than a 15 percent stake. It will not seek a seat on the board or try to participate in management.

Qualcomm Korea President Cha Young-koo said ``This partnership is expected to strengthen our mutual base for more innovative products.''

Pantech was put under a corporate restructuring due to low sales since April 2007 but has turned eight consecutive profitable quarters.

foolsdie@koreatimes.co.kr