Hanwha Aerospace Co., the aviation and defense unit of South Korea’s Hanwha Group, denied reports that it is putting one of its struggling affiliates, Hanwha Techwin Co., up for sale.
“We’re not pursuing the sale of Hanwha Techwin,” Hanwha Aerospace said in a disclosure statement on Tuesday. This was in response to speculation that Hanwha Group is in talks with major investment banks to sell Hanwha Aerospace’s 100 percent stake in Hanwha Techwin.
The two companies were born out of a demerger in February when their predecessor Hanwha Techwin spun off its image security business to focus on aircraft engines. The company was renamed Hanwha Aerospace and was to specialize in aircraft engines and modules. The Hanwha Techwin name was passed onto a new company that took up the business of developing security cameras and surveillance solutions. The new entity was later put under Hanwha Aerospace as one of its five subsidiaries.
Analysts say the sales rumors started circulating as Hanwha Techwin’s mounting losses and gloomy outlook started weighing on its parent company. Hanwha Techwin posted a loss of 21.3 billion won ($19 million) on sales of 580.6 billion won last year, hit by competition from cheaper Chinese rivals. Synergy between the two companies has also been weaker than expected, according to industry experts.
As of 11:22 a.m., shares of Hanwha Aerospace were down 0.22 percent at 22,600 won.
By Hwang Soon-min and Kim Hyo-jin
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