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 percent 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 percent.
Qualcomm said it does not plan to possess any more than a 15 percent 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.
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