Thrunet files for receivership
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South Koreans have been enthusiastic adopters of the Internet
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SEOUL, South Korea (Reuters) -- Korea Thrunet, South Korea's third-largest broadband Internet service provider, has filed for court receivership due to a financial crunch and fierce competition, its main shareholder said.
The moved showed that even in the world's most wired country, some Internet companies are struggling to survive.
"Thrunet has asked for court receivership to protect the interest of clients and shareholders after several attempts to sell the company have failed," Trigem Computer Inc, which owns 31 percent of Thrunet, said in a statement Monday.
The move by Nasdaq-listed Thrunet came after its bigger rival Hanaro Telecom scrapped a takeover bid in January, blaming higher-than-expected costs.
Hanaro had planned to pay 130 billion won ($110 million) to take over a 72 percent stake in Thrunet and assume about 873.6 billion won of its debt.
KT Corp and Hanaro dominate 75 percent of the broadband service market in South Korea, with Thrunet taking up around 10 percent. South Korea has more broadband connections per head than any country.
"We expect the court would accept the (receivership) request by Thrunet because it is perceived that keeping it in business is more worthwhile than liquidating the company," Trigem said.
"There will be no additional loss on Trigem, as the potential risks from Thrunet have already been reflected on the 2002 financial book," Trigem said.
Trigem Computer shares closed down 3.35 percent or 180 won at 5,200 won on Monday, far underperforming the overall market's 2.54 percent gain.
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