Optis-led consortium speeds up acquisition procedures
By Yoon Sung-won
Pantech has a glimmer of hope on the brink of bankruptcy as a consortium of local enterprises has emerged looking to take over the company.
Optis, a consortium of local medium-sized enterprises, sent a due diligence team to the headquarters of the nation's smallest smartphone manufacturer in Sangam-dong, western Seoul, Wednesday.
The team had a meeting with executives including Pantech CEO Lee Joon-woo to discuss a detailed schedule for due diligence and a possible acquisition on July 17 at the earliest, according to industry sources.
Optis signed a memorandum of understanding with the troubled handset maker for the possible acquisition after the Seoul Central District Court gave approval, Tuesday.
Sources said Optis may have to pay 40 billion won ($36.13 million) to acquire Pantech.
To show its willingness, the consortium already paid 2 billion won, or 5 percent of the total investment, as a guarantee deposit which cannot be refunded in the event of the collapse of the deal.
Former Samsung Electronics' executives have contributed to the ongoing deal.
Optis was founded by former Samsung Electronics executive Lee Joo-hyung in 2004. It manufacturers optical disk drives, auto-focusing equipment for cameras and smartphone camera modules. The company posted 15 billion won in operating profit and 599.5 billion won in sales last year.
A local private equity fund SkyLake Incuvest is the largest shareholder of the Optis consortium with 22.46 percent share. SkyLake Incuvest was established in 2006 by the former Information and Communication Minister Chin Dae-jae, who also had been a Samsung Electronics president before being the minister.
With the acquisition of Pantech, Optis is expected to diversify its business portfolio to the smartphone and the Internet of Things businesses as the handset maker holds more than 4,000 patent rights related to the telecom and the Internet of Things technologies.
The Optis consortium also aims at the markets for budget handsets in the Southeast Asian region, instead of competing with Samsung Electronics and LG Electronics, which are the biggest businesses in the global smartphone market.
Expectations are that Optis will conduct research and development in Korea and operate manufacturing in the Southeast Asian region once the deal is made. Optis has operated its own manufacturing line in the Philippines.
It is also expected that Optis may sell its products globally only through online channels. This strategy has been proved successful by the Chinese electronics maker Xiaomi.
There have been several bidders for Pantech's acquisition until the company requested the court to stop the receivership on May 27. But all of them ended up foundered, mostly due to the company's debt which exceeded 1 trillion won as of the first quarter this year.
"Though the acquisition deal is what should be welcomed by many, we cannot know for sure what will happen until the whole process is done," an industry source said.
By Yoon Sung-won
Pantech has a glimmer of hope on the brink of bankruptcy as a consortium of local enterprises has emerged looking to take over the company.
Optis, a consortium of local medium-sized enterprises, sent a due diligence team to the headquarters of the nation's smallest smartphone manufacturer in Sangam-dong, western Seoul, Wednesday.
The team had a meeting with executives including Pantech CEO Lee Joon-woo to discuss a detailed schedule for due diligence and a possible acquisition on July 17 at the earliest, according to industry sources.
Optis signed a memorandum of understanding with the troubled handset maker for the possible acquisition after the Seoul Central District Court gave approval, Tuesday.
Sources said Optis may have to pay 40 billion won ($36.13 million) to acquire Pantech.
To show its willingness, the consortium already paid 2 billion won, or 5 percent of the total investment, as a guarantee deposit which cannot be refunded in the event of the collapse of the deal.
Former Samsung Electronics' executives have contributed to the ongoing deal.
Optis was founded by former Samsung Electronics executive Lee Joo-hyung in 2004. It manufacturers optical disk drives, auto-focusing equipment for cameras and smartphone camera modules. The company posted 15 billion won in operating profit and 599.5 billion won in sales last year.
A local private equity fund SkyLake Incuvest is the largest shareholder of the Optis consortium with 22.46 percent share. SkyLake Incuvest was established in 2006 by the former Information and Communication Minister Chin Dae-jae, who also had been a Samsung Electronics president before being the minister.
With the acquisition of Pantech, Optis is expected to diversify its business portfolio to the smartphone and the Internet of Things businesses as the handset maker holds more than 4,000 patent rights related to the telecom and the Internet of Things technologies.
The Optis consortium also aims at the markets for budget handsets in the Southeast Asian region, instead of competing with Samsung Electronics and LG Electronics, which are the biggest businesses in the global smartphone market.
Expectations are that Optis will conduct research and development in Korea and operate manufacturing in the Southeast Asian region once the deal is made. Optis has operated its own manufacturing line in the Philippines.
It is also expected that Optis may sell its products globally only through online channels. This strategy has been proved successful by the Chinese electronics maker Xiaomi.
There have been several bidders for Pantech's acquisition until the company requested the court to stop the receivership on May 27. But all of them ended up foundered, mostly due to the company's debt which exceeded 1 trillion won as of the first quarter this year.
"Though the acquisition deal is what should be welcomed by many, we cannot know for sure what will happen until the whole process is done," an industry source said.
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