South Korea’s smallest mobile phone maker Pantech Co. after a brief turnaround in 2015 following two painful workout programs has decided to close down its smartphone business again and enter fresh restructuring scheme amid a severe liquidity squeeze.

Pantech Chief Executive Officer Chung Joon warned employees of another restructuring stage after shutting down smartphone business and leaving minimum business like as the Internet of Things business. The company has run into a series of setbacks in new projects such as a joint-venture in Vietnam.

In June last year, it released a new flagship smartphone IM-100 with an aim to sell 300,000 units, but was able to sell just 132,000 units.

Debt exceeded equity capital from the third quarter, and its parent firm Solid Inc. injected emergency funds of more than 100 billion won ($88.8 million) to prevent insolvency. The company posted net loss of 70.6 billion won on sales of 51.4 billion won.

Korean telecom device maker Solid acquired Pantech in a consortium with local optical manufacturer Optis in 2015.

Pantech had been a rising star in the Korean handset industry, but was forced to enter workout programs in 2006 and 2014. The company that produced its first mobile handset in 1997 immediately drew $15 million investment from U.S.-based Motorola Inc. in the following year, but struggled due to aggressive takeovers and declining sales.

It made a strong comeback with budget phones in 2009 by achieving 1 trillion won sales milestone. Thanks to its signature Vega smartphone series, the company even became the country’s second largest smartphone maker after Samsung Electronics. But it failed to stay in the competition where dominant names Samsung Electronics, Apple, and LG Electronics prevail.

Under a new restructuring scheme, Pantech would cut its workforce to 100 or below. It had about 500 staffs working in November 2015 when Solid took over.

By Jin Young-tae and Oh Chan-jong

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