Korean Air Lines Co. said Thursday it has submitted its bid proposal for a controlling stake in South Korea‘s aircraft maker Korea Aerospace Industries Ltd. (KAI).

South Korea’s top air carrier has been left as the only preliminary bidder for the aircraft maker, according to state-run policy lender Korea Finance Corporation (KoFC), the biggest shareholder of KAI with a 26.41 percent stake.

The state-run Korea Development Bank (KDB), the lead manager of the stake sale, set an Aug. 16 deadline for letters of interest for a 41.75 percent stake in KAI, a deal estimated to be worth more than 1.12 trillion won (US$99 million).

KoFc said it will put up a public notice of the preliminary bidding on Monday and accept bids until Aug. 31.

“If any hopeful bidder expresses its intent to buy KAI by that date, it can join the preliminary bidding even if it did not do so today,” the KoFC said in a statement.

KAI‘s main shareholders aim to wrap up the sale by the end of this year after completing final bidding in October.

KAI’s other shareholders include top automaker Hyundai Motor Co. and precision machinery maker Samsung Techwin Co. The KoFc decided not to sell around 15 percent out of its total 26.41 percent stake for the time being, given KAI‘s public role in the defense industry.

Earlier in the day, a Korean Air official said the proposed takeover is aimed at creating a synergy.

Chin Young-wook, president of KoFC, has told lawmakers that shareholders are considering restricting private equity funds from joining the bidding.

Foreign investors are only able to join the bidding as financial investors, not as strategic investors, mainly because KAI’s business is related to the country‘s defense industry.

In order for foreign investors to buy more than a 10 percent stake in KAI, approval from the minister of the knowledge economy is required, and he also needs to consult with the defense minister over the issue, according to the KoFc. (Yonhap News)