Qualcomm gains stake in Pantech in lieu of royalties

Phil Goldstein, FierceWireless

Qualcomm is going to gain a substantial stake in Pantech as part of a debt-to-stock conversion that will see it become the second largest shareholder in South Korea's third biggest handset maker.

Pantech said in a regulatory filing that it will give Qualcomm a 12.55% stake in order to pay off $76.3 million it owes the chip maker in unpaid royalties.

The Korea Development Bank will remain Pantech's largest stakeholder, with 13.87%.

Qualcomm said it does not plan to possess any more than a 15% stake in Pantech, and will not seek a seat on Pantech's board of directors or try to participate in management.

Qualcomm has had a topsy-turvy relationship with the South Korean market recently. In April, the company indicated it wanted to invest in South Korean wireless and health care companies. “There's a lot of different opportunities,” Qualcomm CEO Paul Jacobs said at the time.

And in July, the South Korean Fair Trade Commission fined Qualcomm $208 million for engaging in “unfair” business practices related to its chipset sales.

For more:
- see this Dow Jones Newswires article
- see this Korea Times article  

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