Both sides state their intention to revive talks on transfer of Daewoo's 28.1% stake in aerospace manufacturer
Korean Air's (KAL) stalled efforts to take over Korea Aerospace Industries (KAI) look set to be revived with the reopening of talks covering the acquisition of Daewoo Heavy Industries & Machinery's 28.1% stake.
KAL has been working to acquire KAI since August, when it signed a memorandum of understanding to purchase Daewoo's stake for between 102 billion won ($89 million) and 130 billion won. Alongside the acquisition the other major shareholders, Hyundai and Samsung, would issue new KAI shares to KAL, giving it a majority stake and management control.
Talks collapsed in December after KAL and Daewoo failed to agree on a price and a memorandum of understanding expired.
But Daewoo Heavy Industries & Machinery president Yang Jae-shin said last week that negotiations would resume after parliamentary polls on 15 April.
KAL says a start date for new negotiations has not been scheduled, but adds that "there is an intention to resume the talks. We welcome their attitude." The airline has its own aerospace manufacturing and military maintenance division known as KAL Aerospace.
KAL has said that, if it secures a controlling stake, it will help bring foreign funds into KAI, which was formed in 1999 through the merger of parts of the aerospace divisions of Daewoo, Hyundai and Samsung in a government-instigated move to rationalise the sector.
KAL declined at the time of KAI's formation to fold its financially stronger aerospace unit into the new company, which focuses heavily on military manufacturing work and which has right of first refusal on government projects.
NICHOLAS IONIDES / SINGAPORE
Source: Flight International
