Struggling Pantech asks employees to return part of salary
Employees of the South Korean handset maker have agreed to return 20 percent of their salary from December to March to help Pantech stay afloat amid rising debt and growing concerns over securing a buyer for the company.
Pantech just can't catch a break. After a multitude of debt problems, the South Korean handset maker filed for court receivership (the Korean equivalent to Chapter 11 bankruptcy) in August, and finally decided to sell the company at auction in September.
Last month, as the bidding period ended, it was revealed that nobody had actually submitted a bid for the company.
Now, as the company struggles to find a buyer and stay afloat, the company has asked employees to return 20 percent of their monthly pay from December to March, and it seems as though the employees are quietly complying with the request.
"Last month on November 28, we held an information session for our employees and asked for their consent and our employees decided to participate fully," said a Pantech source.
Industry sources are speculating that the cost-reducing move was made at the request of Pantech's creditors and Seoul Central District Court's bankruptcy division. Rather than resorting to layoffs, the company is opting for other alternatives due to instability in the employment market in Korea.
According to recent reports, Pantech employs roughly 1,600 people, and more than half are currently already on unpaid leave.
Members of Pantech seem positive that a deal for the company will be reached. "We will repay the returned wages as soon as the company's situation improves," said a spokesperson for Pantech.
Samjong KPMG, the accounting firm supervising the sale of the company, said Pantech will be sold via private negotiations rather than an auction format. A spokesperson for Samjong KPMG said, "We will regularly contact potential investors who have shown interest in the company to yield beneficial results."