Thrunet wins court freeze
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South Korea has seen rapid takeup of broadband Internet services.
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SEOUL, South Korea (Reuters) -- A South Korean court has accepted a court receivership request by Korea Thrunet Co, averting a complete liquidation of the country's first broadband Internet service provider, Thrunet said on Thursday.
The Seoul District Court would immediately start managing the Nasdaq-listed company, Thrunet said in a statement.
Thrunet sought court protection on March 3 as it struggled with mounting debt, the result of overspending to catch up with bigger rivals.
The court decision would freeze Thrunet's debt payments, allowing it to use capital for operations, the company said. It is 31 percent owned by Trigem Computer Inc.
"With the debt repayment burden alleviated, Thrunet will be better positioned for future M&A (mergers and acquisitions)," the company said.
Thrunet was the first broadband provider in the country but lost ground to rivals such as market leader KT Corp. Its failure came after another competitor, Hanaro Telecom, scrapped a takeover bid in January, blaming higher costs than it had expected.
Dacom Corp, South Korea's second-largest fixed-line operator, has since expressed interest in buying Thrunet to beef up its meager high-speed Internet business.
KT currently accounts for half of the broadband service market in South Korea, with 5.1 million customers at the end of January. Hanaro has 29 percent and Thrunet 13 percent. Other minor companies include Onse Telecommunications and Dreamline Corp.
Shares in Trigem are 0.11 percent higher at 4715 won, versus a 1 percent drop in the main index.
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