Business & Finance

Eximbank Rejects KAI Sale Amid Consulting Project and Hanwha Stake Surge

By Hur Sung-soo

The Export‑Import Bank of Korea (26.41 %)—KAI’s largest shareholder—has denied plans to sell the aircraft manufacturer, even as it commissioned a consulting service to boost the competitiveness of the Korean aerospace industry. On October 27, the bank’s representative, Hwang Ki‑yeon, told the National Assembly Strategy and Finance Committee that the project, awarded to AT Kearney and budgeted at 1.8 billion won (about $1.36 million), was not based on privatization or a sale, although he could not rule out future changes. The consulting work includes an analysis of major domestic aerospace firms and measures to create global anchor companies, which has fueled speculation that KAI’s ownership could be altered.

Hanwha Group’s rapid increase in its KAI stake has also intensified the debate. The group first disclosed a 5.09 % holding in May and raised it to 15.89 % in August, making it the second‑largest shareholder after Eximbank. Labor unions at KAI have warned that the bank could transfer its stake to Hanwha, raising concerns about a potential monopoly.

KAI’s slower growth compared with other defense firms adds to the pressure. Leaders Index data show KAI’s sales growth from 2020 to 2025 was 30.8 %, the lowest among the five major defense companies, while the average growth of the other four—Hanwha Aerospace, LIG Defense and Aerospace, Hanwha Systems, and Hyundai Rotem—was 200.9 %. KAI’s debt has also risen sharply, from 608.2 billion won in 2023 to 2.9801 trillion won by the end of June, with the debt ratio climbing from 340.7 % to 484.2 %.

A business circle official noted that if Hanwha were to acquire KAI, it would gain an integrated defense system covering land, sea, air, and space, and that private‑sector R&D and rapid decision‑making could accelerate next‑generation weapon development. However, because KAI is a core defense company tied to national security, critics warn that public interest could be compromised and that concentration of power could lead to monopoly or oligopoly concerns in the defense industry.