Shareholders to again seek buyer for Korea Aerospace stakes

Seoul: Korea Aerospace Industries Ltd. shareholders will again seek potential buyers for their 1 trillion won ($895 million) holdings in South Korea’s only aircraft maker, nearly a month after an initial sale attempt failed.

The second round of preliminary bidding will start on Monday and end September 27, Korea Finance Corp., said on Sunday in an e-mailed statement. The first round failed on August 31 after only Korean Air Lines Co. registered. Rules governing sales by government entities require at least two bids.

South Korean lawmakers have expressed concerns about the sale’s transparency ahead of the December presidential election. Some have accused Korea Finance of moving hastily to place the company under private control, which would weaken public oversight.

The pool of potential bidders for Sacheon-based Korea Aerospace, which has a market value of $2.2 billion according to data compiled by Bloomberg, is limited by national-security rules mandating that it remain under domestic ownership. South Korea’s military accounted for 57 per cent of the company’s 1.29 trillion won of sales last year.

Korea Finance is offering part of its 26 per cent stake in Korea Aerospace in the sale. It plans to remain the second- biggest shareholder. Hyundai Motor Co., Samsung Techwin Co. and Doosan Group are each selling 10 per cent holdings.

Korea Aerospace plans to spend 245.4 billion won this year, including construction of a new plant that will make wing components for Airbus SAS A320 planes under a record $1.2 billion deal signed in March.

The company, which also supplies Boeing Co., said in February total orders this year may more than double to 5.45 trillion won. Second-quarter net income increased 27 per cent to 44.1 billion won and sales rose 6.6 per cent to 395.5 billion won.