Shareholders of Pantech approved Saturday the mobile phone maker’s merger with its affiliate Pantech&Curitel Communications to sharpen its competitive edge in the global market.

The two companies announced the merger plan last month, aiming to launch the new entity on Dec. 30.

The merged company will aim to post 5 trillion won (US$4.3 billion) in sales and to sell 25 million units of mobile phones in 2013, Patech officials said.

Pantech and Pantech&Curitel Communications have been under a debt rescheduling program since they were bailed out by the state-run Korea Development Bank (KDB) with 1.28 trillion won in 2007. The program is scheduled to be completed at the end of 2011.

In mid August, the two firms’ creditors agreed to convert debts worth 220 billion won into equity.

KDB, the main creditor of the local handset makers, holds 19.52 percent stake in Pantech and 11.32 percent interest in Pantech&Curitel.

Founded in 1991 as a start-up manufacturer of pagers, Pantech was once hailed as a model for venture businesses. But it began to face difficulties in 2006 after expanding on borrowed funds and acquiring a mobile phone-making unit from SK Telecom, the country’s top wireless company.

Pantech, together with Pantech&Curitel, is South Korea’s third-largest mobile phone manufacturer after Samsung Electronics and LG Electronics.

YonhapNewsAgency

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