By Yoon Sung-won
The fate of debt-ridden Pantech hinges on the country's three telecom carriers agreeing to turn their accounts receivable into equity capital in the handset maker.
If they do not, the nation's smallest smartphone maker will either be sold to a foreign company or go bankrupt.
The Korea Development Bank (KDB), the key creditor bank of Pantech, has asked SK Telecom, KT and LG Uplus to take part in a capital-increase plan to addressing the debt of the handset maker.
The three have a total of 180 billion won in accounts receivable.
"In consideration of all aspects of its business, Pantech is unlikely to get additional funds from creditors," an official at KDB told The Korea Times, Tuesday. "Still, the firm is estimated to be more viable with a capital increase than being sold."
Several foreign companies such as Indian smartphone maker Micromax and China's Lenovo have been identified as possible investors since last year.
In competition with much bigger smartphone makers Samsung Electronics and LG Electronics in the local market, chances remain slim for Pantech to win over the two.
Without additional financial support, the chance of the firm's independent survival will become slimmer, given that enormous investment is required for new handsets.
Pantech could also go under a court receivership plan.
Court receivership would be the worst option because it would make it harder for the company to remain operational.
If the debt is swapped for new shares of Pantech, disposing of the shares will also be a burden for the telecom firms.
An industry source said it is better to have more players in the smartphone market since it will give more choices, both for customers and service providers.
Samsung Electronics, another creditor of Pantech, said it has no official statement about the matter since it already announced that it does not plan to participate in the company's management.