Hanwha Aerospace Co Ltd, South Korea's biggest defence company, announced on Thursday that it planned to increase its equity capital by 3.6 trillion won ($2.5billion) in order to expand overseas and domestic production.

Hanwha said it "plans" to establish strategic production bases overseas in Europe, Australia, the Middle East and the United States where the mid-to-long-term demand for defence is expected to increase.

It plans to use the 1.6 trillion won for overseas production bases of ground defence weapons, including setting up local factories and purchasing stakes in other defense firms.

Hanwha announced that it would issue 5,95 million new shares in connection with the capital increase. This announcement was made separately by Hanwha. The announcement was made after the market closed in Seoul.

Hanwha manufactures ground-based artillery, such as K9 Self-Propelled Howitzers (of which it is the leading exporter in the world), Chunmoo Multiple Rocket Launchers, and Redback Armoured Vehicles - purchased by countries like Poland, Romania, and Turkey.

The government also plans to spend 900 billion won on improving domestic production, 300 billion won for developing engines for unmanned aircraft and 800 billion won on securing overseas shipbuilding sites.

Hanwha Ocean's Hanwha affiliated shipbuilder has received maintenance orders from the U.S. Military for ships.

South Korea previously stated that it wants to be the fourth largest defence exporter in the world by 2027. $1 = 1,463.3200 yen (Reporting and editing by Ed Davies, Rachna uppal and Kevin Liffey).

(source: Reuters)