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.