Indian mobile phone manufacturer Micromax is looking to pick up a stake in Korean mobile phone manufacturer Pantech, as part of its international expansion plan, reports Reuters. According to its sources, Micromax is among the companies that are interested to invest in Pantech that has been reeling in debts for past two years.
Nine creditor banks own a combined 37% of the company, followed by Qualcomm Inc that owns a 12% stake. Micromax won’t be the first mobile manufacturer to invest in Pantech as Samsung had acquired a 10% stake worth $47 million reportedly last year. Pantech had reported $181 million in losses last financial year, from revenue of $2.17 billion. Most of it came from the sale of 12 million phones in Korea, that gave it a marketshare of 20% in the country. The company owns 4,800 patents in domestic and overseas markets, apart from 18,700 IP rights.
Why would Micromax invest? Micromax has been focusing on Russia and Eastern Europe for international expansion, apart from other countries in the Indian subcontinent. It has not mentioned any plans to enter markets in south east asia or US, the two markets Pantech sells in, so this move is bit of a surprise.
It is not clear what Micromax will gain from such an investment. May be the company will get to use some of the IP developed by Pantech, but it is not clear how much influence the Indian company can have considering that Samsung is also a significant shareholder. It could also use Pantech’s expertise while expanding to other markets.