Hanwha Aerospace Co. is in advanced discussion with Saudi Arabia on the potential collaboration of weapons as the Middle East becomes the main objective of the company, according to the head of its global defense activities.
The booming opportunities in the region are a major reason why the largest defense entrepreneur in South Korea has decided to announce asales planLast month to collect funds, said Michael Coulter, who was appointed president of the defense and chief executive officer in Hanwha at the end of last year.
“We are in discussions in both Saudi Arabia and the United Arab Emirates at the moment on programs that will create a capacity in the Middle East, which addresses sovereign problems,” and also helps solve security threats, said Coulter in an interview with Bloomberg. “There is a real opportunity for us to take up safety challenges in the Middle East through local facilities.”
Hanwha was one of the largest beneficiaries of the strong increase in global demand for weapons on the ground after the start of wars in Ukraine and the Middle East. SocietyActions have ralliedAlmost 30 times in the past five years, and it is the most efficient stock in Asia this year. Known for its ability to deliver weapons faster and cheaper than its competitors, the flagship weapons of the company include theK9 self -owned belly.
The actions of the company fell 2.1% on Tuesday while the Kospitic benchmark has changed little.
Hanwha still decides on the exact form of his involvement in Saudi Arabia, but he could be able to announce an agreement later this year, said Coulter, a former US naval officer.
“We have not yet made a decision on the fact that it is an installation in Saudi Arabia, or a joint venture, or a partnership, or that we support a Saudi defense company, so it is that market demand is there,” he said.
Hanwha's openings arrive while Saudi Arabia investslocate50% of its military spending by 2030 as part of the plan it called Vision 2030.
Sales of weapons of the Middle East are a sensitive subject for South Korea, because the country seeks to balance its links with the Arab states and its relations with its only treaty in the United States, which has long been security relations with Israel.
Controversial sale
Hanwha earlier this month, reduced the size of its expected action for 2.3 billions from Won ($ 1.6 billion), against 3.6 original billions, following the decline in investors and financial authorities. The financial supervision service has also opposed its revised plan.
The decision to reduce the offer has shown “a very responsible desire for a company to listen to its investors and shareholders,” said Coulter.
“Yes, there is a potential for a slight short-term dilution, but look at our history, look at the opportunity of the market, we have traveled everyone where we make investments and the return to these investments from a commercial point of view,” he said.
European plans
Hanwha is also in talks with a number of Western Europe countries on how this can help them increase their weapon manufacturing capacity in the face of increasing global instability.
“We do not intend to come and take over and move European partners,” said Coulter. “We are talking with governments, but we also talk to industry and say where you have invested?” Where did you not have invested? Where can we be partners? ”
Coulter said it was optimistic that the United States and South Korea will reach an agreement that would avoid an prolonged commercial dispute resulting from the threat of the Trump administration of higher prices.
“We are very convinced that the two governments will resolve,” he said.
“There is a huge presence of the American army here. We have American navy ships in our shipyards here in Korea. So our governments speak through it. I am carefully optimistic that will take place and that will not become a political problem. ”
This story was initially presented on Fortune.com
