KAI To Have Majority Stake In Partnership

Korea Aerospace Industries (KAI) and Eurocopter firmed up a prior industrial cooperation agreement this week at the Seoul Air Show, through the signature of a Memorandum of Understanding (MOU) on Thursday.

The signing ceremony was graced by the presence of the CEOs from both entities, Mr. Chung Hae Joo of KAI and Dr. Lutz Bertling from Eurocopter. The objective of the MOU is to create a Joint Venture (JV) Company for the worldwide promotion of the Korean Utility Helicopter (KUH), an 8 metric-ton class military/utility transport helicopter.

The JV will be in operation by 2010. With a shareholding structure of 51% for KAI and 49 % ownership for Eurocopter, the newly-established company will be responsible for the sale and marketing of the KUH on the export market, which is estimated to reach an order of 300 helicopters.

This signature strengthens the 2006 launch of the KUH program in Korea. Eurocopter notes the JV contract is the largest ever signed with a European company.

The Republic of Korea has a plan to buy from KAI, which is prime contractor for this program, around 250 KUH. Eurocopter is slated to provide technical assistance for the development of the helicopter as well as certain sub-assemblies. About 40 Eurocopter engineers are housed at Sacheon to render their ultimate technical assistance to KAI.

The Korean Helicopter Program (KHP) is to develop a military utility/transport helicopter (KUH, Korean Utility Helicopter) in the eight-metric-ton class. The KUH is to replace Bell UH-1Hs and McDonnell Douglas 500MDs in the South Korean Army fleet. First deployment is scheduled in 2012.

FMI: www.eurocopter.com, www.globalsecurity.org/military/world/rok/khp.htm