ZTE may purchase Pantech

By Kim Yoo-chul

China's budget smartphone manufacturer ZTE is trying to buy the troubled Korean handset maker Pantech, according to sources Thursday.

Pantech, now under court receivership, is valued at $400 million by creditors.

"ZTE expressed its interest in buying Pantech and submitted a letter of intent," said a Pantech official.

An official from Samjong KMPG was less definitive, saying: "We can't specify the name of companies that have submitted a letter of intent for Pantech; however, a Chinese company is one of them."

Samjong plans to choose the preferred bidder by late October and complete the deal by February next year. Pantech currently owns 291 U.S. patents, with 269 utility patents and 22 design patents.

It also has 2,500 Korean patents and 200 European patents, said both Pantech officials and sources in the banking industry.

Pantech is currently under a court-receivership program since August of this year after SK Telecom, KT and LG Uplus refused to extend financial support to the nation's number three handset maker.

"Pantech can be turned around thanks to new subsidy caps and global demand for budget models," said the Pantech official. In 2012, ZTE introduced a budget mobile here without much success.

Pantech is accelerating its moves for the machine-to-machine market as the manufacturer identified this as one of its next growth engines.

"Pantech is quite attractive in terms of its patent portfolio and technologies," said an official at LG Electronics.