South Korean handset manufacturer VK Corp. collapsed under the weight of its debts, dealing a fresh blow to the country's already struggling midsize handset manufacturers.
VK Corp. defaulted on promissory notes worth 1.78 billion won (US$1.9 million) on Friday, prompting its creditor banks to declare it insolvent.
"We declared VK insolvent after it informed us that it can not repay the debt by today," a spokesman for Industrial Bank of Korea, VK Corp.'s main creditor, said. VK Corp. will be put under the creditors' control, the spokesman said.
VK Corp. has 209.4 billion won in interest-bearing debt for the first quarter of this year. During the same period, VK Corp. reported a net loss of 16.5 billion won on sales of 97.5 billion won, according to Korea Information Service Inc., a corporate credit information service provider.
Shares of VK Corp. were banned from trading and the company will be de-listed on July 22, analysts said.
The collapse of VK Corp. is expected to deal a blow to SK Telecom Co.'s venture in the United States. VK Corp., listed on the tech-heavy KOSDAQ market, is a sole handset provider for SK Telecom's mobile phone joint venture in the U.S., they said.
Later in the day, the Korea Exchange (KRX) said in a regulatory filing that it has decided to delist the shares of VK Corp. on July 22.
Seoul, July 7 (Yonhap News)
S. Korean handset maker VK Corp. collapses under heavy debts |
