[COVER STORY] Debate grows over KAI privatization as Hanwha aims to expand stake

The privatization of Korea Aerospace Industries (KAI) could gain momentum as the state-run Export-Import Bank of Korea (Eximbank) commissions a 1.8 billion won ($1.36 million) consulting project and the Fair Trade Commission (FTC) highlights the benefits of stronger competition among major defense companies. Although Eximbank and KAI have expressed reservations about a change in ownership, KAI’s slower growth compared to its defense industry peers, despite a boom in arms exports, is fueling calls for privatization. Eximbank is KAI’s largest shareholder, with a 26.41 percent stake. According to Rep. Ahn Sang-hoon of the main opposition People Power Party and other sources, Eximbank recently selected AT Kearney as the preferred bidder for the consulting project and is proceeding with the subsequent steps. The project will examine ways to strengthen Korea’s aerospace industry and foster global anchor companies. Reports that the project was initiated at the government’s request have also sparked controversy. On Oct. 20, KAI CEO Kim Jong-chool said the company’s ownership structure