Israeli Defense Chief Visits S. Korea on Jet Contract, UPI Says

Israeli defense chief Udi Shani has flown to South Korea for talks on a $1 billion contract for trainer jets, United Press International reported yesterday, without citing anyone.

Korea Aerospace Industries Ltd. (047810) and Italy’s Alenia Aermacchi SpA are competing for the sale, the report said. An official at South Korea’s defense ministry declined to comment. He declined to be named, citing military policy.

Shani was in Italy last week for talks with Alenia, which has offered its M-346 Master as a replacement for the Israeli air force’s Douglas A-4 Skyhawks, which are being retired, UPI said. Korea Aerospace is offering its T-50 Golden Eagle trainer, the report said.

Korea Aerospace, the country’s biggest planemaker, won a $400 million contract in May to sell 16 T-50s to Indonesia, and expects that first export order for the aircraft may also help it win sales in Israel, Poland and the U.S.

The South Korean government has said that it aims to boost annual overseas sales of weapons to $4 billion and expand total production to $10 billion in 2020.

Korea Aerospace (047810) shares fell 0.7 percent to close at 38,350 won yesterday, while the local benchmark Kospi (KOSPI) index dropped 1.1 percent.

To contact the reporter on this story: Sungwoo Park in Seoul at spark47@bloomberg.net.

To contact the editor responsible for this story: Paul Tighe at ptighe@bloomberg.net

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