SEOUL, May 05 (AJP) - South Korea's defense powerhouse Hanwha Aerospace has increased its stake in Korea Aerospace Industries to 5.09 percent and changed its investment status to management participation, signaling a drive to consolidate South Korea's defense and space sectors.
The company plans to invest a total of 500 billion won to reach an 8.03 percent stake by the end of the year. This shift positions Hanwha to influence the decision-making processes of South Korea's sole indigenous aircraft manufacturer as it seeks to build a vertically integrated aerospace powerhouse.
Hanwha Aerospace disclosed on the fourth of the month that it acquired an additional 100,000 shares, representing 0.1 percent of the company. The purchase brought the combined holdings of Hanwha Aerospace and its affiliates past the five percent threshold.
The firm officially reclassified its holding from a simple investment to management participation in a recent regulatory filing. While specific methods of involvement are still under review, the company stated it would participate in decision-making through legal procedures to meet management objectives.
Hanwha Aerospace noted it would consider the interests of shareholders and stakeholders during this process. The company currently maintains domestic competitiveness in aircraft engines, avionics, radar, and space launch vehicles.
The expansion is interpreted as the final piece of Hanwha Group's defense strategy to create a South Korean version of SpaceX. By combining its engine expertise with the airframe and satellite capabilities of Korea Aerospace Industries (KAI), the group aims to secure an end-to-end aerospace value chain.
Market analysts suggest the increased stake and change in investment purpose serve as a foundation for an eventual takeover of the aircraft manufacturer. KAI remains the only domestic firm capable of developing and producing complete aircraft and advanced aerial combat systems.
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