According to the head of Global Defense Business, Hanwha Aerospace Co. is having a high-level discussion with Saudi Arabia about potential weapons collaborations as the Middle East is the main focus of the company.
The region’s fast-growing opportunities are the main reasons why South Korea’s biggest defense contractors decided to announceShare Sale PlanLast month, Michael Coulter, who was appointed president and CEO of Hanwha’s global defense late last year to raise funds, said.
“We are discussing programs that create capabilities in the Middle East, and programs that address sovereign issues in both Saudi Arabia and the United Arab Emirates,” which also helps address security threats. “There is a real opportunity to address security challenges in the Middle East through local facilities.”
Hanwha is one of the biggest beneficiaries from the surge in global demand for ground weapons following the outbreak of wars in Ukraine and the Middle East. Company’sStocks recoveredIt’s almost 30 times over the past five years, and this year it’s the top-performing stock in Asia. The company’s flagship weapons are known for their ability to deliver weapons faster and cheaper than their rivals.K9 self-employed how bullet gun.
The company’s shares fell 2.1% on Tuesday, with benchmark Kospi barely changing.
Hanwha still decides the exact form of his involvement in Saudi Arabia, but the agreement could be announced later this year, former US naval officer Coulter said.
“We haven’t made a full decision yet on whether it’s a Saudi facility, a joint venture, a partnership or whether it’s supporting Saudi defense companies, so the market demand is there,” he said.
Hanwha’s overture comes as Saudi Arabia invests trillions of dollars in plans to develop a non-oil economy, including its targetsLocalization50% of military spending up to 2030 through 2030 is called Vision 2030.
The sale of Middle Eastern weapons is a sensitive topic for South Korea as it seeks to balance relations with Arab countries with relations with the only US treaty allies with long-standing security ties with Israel.
Controversial sales
Earlier this month, Hanwha reduced the size of its planned stock sales to 2.3 trillion won ($1.6 billion) from the original 3.6 trillion won, following pushbacks from investors and financial authorities. Financial Supervisory Services is also opposed to the revised plans.
The decision to reduce offerings “has shown a very responsible willingness by companies that listen to investors and shareholders,” Coulter said.
“Yes, there’s a small potential for dilution in the short term, but looking at the track record, seeing the market opportunities, we walked everyone around investing and making returns on those investments from a business standpoint,” he said.
European plans
Hanwha has also spoken with many Western European countries about how it can help improve weapons-building capabilities in the face of increasing global instability.
“We are not going to take over and drive away our European partner,” Coulter said. “We’re talking to the government, we’re talking to the industry, where did you invest? Where are you investing? Where are you investing? Where can we become partners?”
Coulter said he is optimistic and that the US and South Korea will reach deals that avoid prolonged trade disputes resulting from the Trump administration’s higher tariff threat.
“We are confident that two governments will come to a solution,” he said.
“There’s a huge US Army presence here. There’s a US Navy ship at the Korean shipyard. So the government is talking about it. I’m cautiously optimistic and that won’t become a political issue.”
This story was originally featured on Fortune.com.
