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Korea Republic of : KAL's plan to acquire a controlling stake in KAI sinks.

A lack of bidders seems to have sunk the plans of Korean Air Lines (KAL)'s to acquire a 41.75% stake in Korea Aerospace Industries (KAI).

The carrier has informed in a stock exchange statement that it has sent a bid to acquire the stake in South Korea's plane-maker, however the law calls for the submission of at least two bids for the sale to proceed.

According to industry sources in Seoul, the carrier has long been interested in acquiring a controlling stake in KAI.

Along with its airline operations, KAL makes components for several major commercial aircraft programmes and offers MRO services for both commercial and military aircraft.

The carrier hopes to play an increasingly major role in making its own aircraft and has worked on several unmanned air vehicles.

The acquisition of KAI, the maker of the T-50 advanced jet trainer, FA-50 light fighter, KT-1 basic trainer and subassemblies for several other aircraft types, would make KAL the leading player in the South Korean aerospace industry.

KAI has made it known on 31 July that six of its stakeholders are offering to sell a combined 41.75% stake in the firm, 11.4% of which comes from state-held Korea Finance Corporation.

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Publication:Mena Report
Date:Sep 3, 2012
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