Hanwha Aerospace said in a regulatory filing that it has secured a 6.5 percent stake in aircraft manufacturing monopoly, completing earlier than planned its goal of investing 500 billion won ($330 million) to buy additional shares in the company by the end of this year.
Hanwha Systems also acquired additional KAI shares worth 125 billion won, raising its stake to 1.53 percent. Combined with the 1.01 percent stake held by Hanwha Aerospace USA, the group now holds 9.04 percent of KAI.
The stake makes Hanwha the second-largest shareholder of KAI after the Export-Import Bank of Korea, which holds 26.41 percent.
Hanwha Aerospace also held a board meeting Tuesday and approved a plan to invest another 500 billion won by the end of this year to raise its own stake in KAI to 9.97 percent, based on KAI’s closing price of 147,600 won on Monday.
If completed, Hanwha Group’s total stake in KAI is expected to exceed 12 percent.
Hanwha previously changed the purpose of its KAI shareholding from simple investment to management participation.
The group said it will consider matters related to KAI’s decision-making process through lawful procedures as a shareholder, while taking into account the interests of the company, shareholders and other stakeholders.
Hanwha said the stake increase is aimed at strengthening South Korea’s national security and enhancing the global competitiveness of the country’s space and aerospace industries.
The group said greater cooperation between Hanwha and KAI could help reduce overlapping investment and create synergy in the domestic space and aerospace sector.
Hanwha has invested for more than 30 years in areas including aircraft engines, avionics, radar, satellites, space launch vehicles and ground defense systems. KAI is South Korea’s only aircraft developer and manufacturer and also has capabilities in satellite development and air combat systems.
Hanwha Aerospace is based in Changwon, while KAI is based in Sacheon, both in South Gyeongsang Province. The group said closer cooperation between the two companies could also support the development of a southern space and aerospace industrial belt linking Changwon, Sacheon and Goheung, where the Naro Space Center is located.
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