Korea Aerospace stake to be put up

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Korea Aerospace stake to be put up

Korea Finance will select arrangers this month as it prepares to sell a stake of more than 40 percent worth about 1.17 trillion won ($1 billion) in Korea Aerospace Industries, the country’s only aircraft maker.

The state-run financier and three other shareholders expect to sell the stake in Korea Aerospace by the end of this year, Chief Executive Officer Chin Young-wook told reporters in Seoul yesterday. The other shareholders include Hyundai Motor, Samsung Techwin and Doosan Group.

The stake, being sold as part of President Lee Myung-bak’s pledge to sell bailed-out companies, may draw bids because of Korea Aerospace’s rising sales of planes and parts, said Paul Hah, an analyst at Woori Investment & Securities. The company won its first overseas order for the T-50 trainer jet last year and it signed a record $1.2 billion order for Airbus SAS wing components in March.

“It’s an attractive target that has great growth potential,” Hah said. “The Korean government will also continue to support the aerospace industry because of the geopolitical risks the country faces.”

The company will sell part of its 26 percent stake in Korea Aerospace, while the other three shareholders will each sell all of their 10 percent holding, Chin said. The Sacheon-based plane maker has a market value of 2.93 trillion won, according to data compiled by Bloomberg.

About five arrangers are expected to be selected for the sale, Chin said without elaboration. Korea Finance will remain the second-biggest shareholder of the company, he said.

The aircraft maker expects to win 5.45 trillion won in new orders this year, more than double last year’s tally of 2.28 trillion won. First-quarter operating profits jumped more than five-fold to 24.8 billion won. The company raised 567.5 billion won in an IPO in June. The stock has almost doubled from its IPO price of 15,500 won. Bloomberg

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