Negotiations between Korea Aerospace Industries (KAI)and foreign direct investors (FDI) BAE Systems and Boeing have been extended to the end of this month. Talks were due to end last month, but dragged because of concerns over KAI's business plan and the interests of the parties concerned.
"Since we could not get the level of comfort we were seeking, we have mutually agreed to extend the deadline," says KAI. One sticking point is thought to be BAE's commitment to the T/A-50 Golden Eagle (former KTX-2) supersonic trainer, although the UK company says it is "fully committed".
Pending a deal, KAI has secured a $25 million loan from the Toronto Dominion Bank of Canada through a floating rate note issue. "They need cash, and in-country they can't get any money until they sign the contract with the FDIs," says a Seoul industry source.
BAE and Boeing are to buy about 30% of KAI, formed late last year from a merger of most of the aerospace capacity of Daewoo Heavy Industries, Hyundai Space and Aircraft, and Samsung Aerospace. Korean Air's aerospace division is the only South Korean manufacturer outside KAI.
Source: Flight International
